The demand for parrots for pet and scientific purposes is an increasing phenomenon. Yet, the cognitive complexity of these animals makes it difficult to fully satisfy their eco-ethological needs in captivity, and strategies commonly adopted for their husbandry are often unsuccessful in guaranteeing their wellbeing. In this study, we investigated the effects of environmental restrictions on the behavioural repertoire of budgerigars, the most common parrot in captivity. Specifically, stereotypies and other behavioural indicators of stress were analyzed with respect to social and spatial housing conditions, that is, the number of individuals per housing unit and the size of the cages. In the first experiment, we compared the behavioural response of budgerigars maintained in three different housing conditions and we observed that levels of stereotypic and non-stereotypic behaviours increased from mild to severe captive restrictions. We also found that this response varied between males and females. In the second experiment, we investigated the behavioural repertoire of budgerigars when rearranged in their housing units. We observed that some of the previously observed stereotypic behaviours were significantly reduced soon after individuals were allowed to interact with multiple social partners.