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Construction and demolition waste (C&DW) contribute to approximately 30% of the total waste generation worldwide, by which heterogeneous ecological impacts, such as resource depletion, global warming, and land degradation, are engendered. Despite ongoing research efforts to minimize construction waste via the Building Information Modeling (BIM)-aided design, there is a paucity of research on integrating BIM in demolition waste management (DWM). This study investigates prominent barriers and future research directions toward the wider adoption of BIM in C&DWM by conducting a systematic literature review. First, this study identifies the barriers that hinder the implementation of C&DWM in Australia; then, it explores the benefits and challenges of leveraging BIM applications for C&DWM. The findings suggest that, for existing buildings without up-to-date design drawings, it is imperative to improve the accuracy of data capturing and object recognition techniques to overcome the bottlenecks of BIM-DWM integration. Moreover, the development of regional-oriented material banks and their harmonization with life cycle assessment databases can extend the potential of BIM-based sustainability analysis, making it applicable to the DWM domain. This study proposes a research agenda on tackling these challenges to realize BIM’s full potential in facilitating DWM.