Bengaluru Real Estate Market Report: Latest Trends, Pricing & Outlook

Market Overview: Strong Appreciation Amidst Challenges

Bengaluru’s real estate market continues to demonstrate resilience in late 2025, though with a more balanced outlook than earlier years. The Bengaluru city recorded the highest property price growth among India’s top seven metros, with residential prices appreciating 15–16% year-on-year as of Q3 2025, rising from ₹7,713 per sq ft in Q3 2024 to ₹8,870 per sq ft in Q3 2025. This represents a quarterly appreciation of 12.6%. Overall annual price growth is projected at 7–9% for 2025, moderating from exceptional double-digit growth seen in previous years.

However, the market exhibits a significant shift in composition and buyer sentiment. High-end and luxury segments now dominate launches, accounting for 51% of Q3 2025 residential launches, while mid-segment housing has largely disappeared from new supply. This bifurcation reflects a critical affordability crisis affecting the city’s traditional middle-class homebuyer base, even as luxury demand remains strong.

Residential Segment Analysis

Overall Market Dynamics

Bengaluru’s residential sector witnessed 102 million sq ft (msf) of sales in FY24, but sales declined 2% in FY25 to 99 msf, primarily due to a 41% collapse in the affordable segment. Q1 FY26 showed recovery with 52 msf of sales (14% year-on-year growth), though momentum faces headwinds in H2. As of Q3 2025, the city had approximately 58,700–58,900 unsold units, representing an 11-month inventory overhang and a 30% year-on-year increase in unsold stock—the highest among major Indian metros.

Price Trends Across Segments

The average residential property price in Bengaluru ranges from ₹4,650 to ₹18,530 per sq ft, with significant variation by location and segment. Current price ranges across key segments:

• Mid-Premium Housing: ₹8,000–₹12,000 per sq ft
  
• Luxury Housing: ₹12,000–₹18,000+ per sq ft
  
• Affordable Segment: ₹4,500–₹6,500 per sq ft (limited supply)
  

Rental Market Performance

Bengaluru’s rental market shows resilience with improved yields and strong occupancy. Average rental yields improved to 3.8% city-wide, with occupancy rates reaching 92% in prime locations. High-yield areas include:

• Bagalur & Hennur: 4.5–5.2% rental yield
  
• Sarjapur & Marathahalli: 4.2–4.8% rental yield
  
• Electronic City: 4.2–4.8% rental yield (highest among established corridors)
  
• Aerospace Park Corridor: 4.8–5.5% rental yield
  

Rental demand increased 35% compared to 2024, with new rental registrations up 28% year-over-year. However, rental growth has moderated from the previous year’s 15–20% surge to 7–8% in 2025, suggesting market stabilization.

Key Micro-Markets & Price Analysis

Whitefield: Premium IT Hub

Whitefield remains Bengaluru’s most established luxury corridor, though it shows signs of market maturation. Average residential property prices hover around ₹9,115 per sq ft, with commercial spaces averaging ₹12,180 per sq ft. The area has witnessed exceptional price appreciation—36.1% annually in recent years, with over 100% gains in some micro-pockets over three years. For commercial real estate, Class A office spaces are priced between ₹12,000–₹13,000 per sq ft with rental yields of 5–6%. However, the market shows signs of saturation with oversupply risks in certain pockets.

Sarjapur Road: Emerging Tech Corridor

Sarjapur Road has emerged as 2025’s hottest real estate market, driven by major infrastructure projects and IT hub connectivity. Property prices have surged from ₹5,870 per sq ft in 2019 to ₹10,200–₹11,000 by mid-2025, representing 73% appreciation over six years and 84% since 2019. Premium enclaves command prices up to ₹12,000+ per sq ft.

Monthly rents for 2BHK units range from ₹35,000–₹39,000 as of mid-2025, reflecting 75% rental growth since 2021 and generating gross yields of 3.5–4.5%, above city average. Experts forecast 8%+ annual capital appreciation through 2027, driven by continuous IT expansion and major infrastructure projects.

Outer Ring Road: Commercial Powerhouse

The ORR submarket has become Bengaluru’s dominant commercial corridor, contributing 40% of gross office leasing values in Q3 2025. The corridor hosts 60 million sq ft of commercial/IT office space with projections to touch 100 million sq ft. However, severe gridlock has emerged as a major constraint, with the road designed for 9 million trips per day now handling 13+ million, necessitating urgent infrastructure upgrades.

From January to September 2025, ORR experienced net absorption of 3.6 msf of office space, with an additional 16 msf planned or under construction. Market rents for premium office spaces have crossed ₹100 per sq ft per month.

North Bangalore: Fastest-Growing Zone

North Bangalore has transformed into the city’s premier growth engine, with locations like Devanahalli, Hebbal, Bagalur, Hennur, and Jakkur experiencing exceptional growth:

• Devanahalli: ₹4,500–₹8,500 per sq ft (15–20% YoY growth, with gated plots at ₹4,200–₹5,500/sq ft)
  
• Hebbal: ₹9,000–₹14,000 per sq ft (17% YoY growth as of June 2025)
  
• Bagalur: ₹9,296 per sq ft average, with 116.2% total price appreciation between 2019–2025 (13.7% CAGR) This represents India’s top-performing real estate micro-market.
  
• Hennur Road: ₹5,800–₹7,100 per sq ft (7–9% growth, emerging residential zone)
  
• Jakkur: ₹7,500–₹11,000 per sq ft (9–11% growth, premium segment)
  

Forecasts predict 20–25% additional appreciation in Bagalur by 2027 with feeder connectivity completion, with projected 20–30% investment returns over 2025–28.

Electronic City: Affordable South Corridor

Electronic City offers the best rental yields among established corridors. Average residential prices are ₹6,800 per sq ft with 2BHK rents of ₹20,000–₹30,000, generating 4.2–4.8% rental yields—the highest among top five investment zones. The area benefits from Yellow Line metro operations and serves as an affordable yet well-connected alternative to northern corridors.

Emerging Markets

Other emerging investment hotspots include:

• Whitefield Extended Corridor: 8–10% annual growth, 4–5% rental yield
  
• Kannamangala–Seegahalli: 9–11% annual growth, 3–4% rental yield (20–30% cheaper than Whitefield)
  
• Hennur–Dasarahalli Belt: 6–8% annual growth, 3.5–4.5% rental yield
  
• Bannerghatta South: 8–9% annual growth, 4–6% rental yield
  

Commercial Real Estate Market

Office Segment Strength

Bengaluru’s commercial real estate demonstrates robust fundamentals despite ORR congestion concerns. Q2 2025 saw gross leasing volume (GLV) of 5 msf with 2.4% quarter-on-quarter growth. Net absorption stood at 3.5 msf, representing a 41% increase from previous quarter. Top occupier sectors include IT-BPM (59%), flexible workspaces (14%), and engineering & manufacturing (13%).

Q3 2025 new office supply reached nearly 3.6 million sq ft, representing 21% quarterly growth, with ORR accounting for 88% of this supply. Market rents have exceeded ₹100 per sq ft per month. Emerging hotspots include Sarjapur Road, Hebbal, North Bangalore, and Electronic City, marking a shift from traditional CBD areas.

Retail Segment

Bangalore leads India’s retail leasing market with a 34% share in Q1 2025, accounting for over 3 msf of leased retail space. Fashion and apparel dominate retail demand, followed by food & beverage and entertainment. Approximately 5 new malls opened in Q1 2025, adding 2 msf of retail space. Key retail hotspots include MG Road and Koramangala.

Co-working Expansion

Flexible co-working spaces in Bangalore are booming, particularly favored by startups and SMEs. A historic 22% quarterly demand increase was reported, with locations like Koramangala and HSR Layout seeing strong traction.

Industrial & Logistics Segment

Bengaluru’s warehousing sector is experiencing unprecedented growth, expected to reach 70 million sq ft in 2025, driven by institutional developers such as Indospace, Ascendas, and Prologis. For year-to-date 2025 (through September), the market added 8.2 msf of new supply, with 77% being Grade A quality.

Key highlights:

• Market Growth: 40% surge in 2024, with 3.8 msf of warehousing absorption in 2024 and 8.1 msf net absorption for YTD Sep 2025 (52% increase YoY)
  
• Hotspots: Hoskote-Devanahalli leads with the largest supply share, followed by Hosur Road–Hosur City
  
• Rental Yields: 8–10% for Grade-A facilities on major corridors
  
• Occupancy: Vacancy decreased 60 basis points year-on-year to 9.9%, with Grade A spaces at only 3.2% vacancy
  
• Demand Drivers: Engineering and FMCG sectors drove 55% of quarterly demand
  

Primary warehousing locations include:

• Hosur Road: ₹22–₹28/sq ft/month for Grade-A warehouses with 8–10% rental yields
  
• Hoskote-Devanahalli: Eastern growth node with strong supply-demand dynamics
  
• Nelamangala, Dabaspet, Bidadi: Western corridor warehousing hubs
  

Institutional backing over 90% of new Grade-A supply ensures quality standardization.

Infrastructure & Connectivity Impact

Namma Metro Expansion

Metro expansion is reshaping Bengaluru’s real estate geography and property valuations. The network is being expanded under Phase 3, which includes two major corridors:

• 32.15 km from JP Nagar Phase 4 to Kempapura (44+ km total, 31 elevated stations, completion by end-2029)
  
• 12.5 km from Hosahalli to Kadabagere
  

Additionally, Phase 3A (Red Line) is a 36.59 km corridor from Sarjapur (southeast) to Hebbal (north), connecting major IT hubs and significantly improving city-wide connectivity. The BMRCL plans to add 220 km of metro lines by 2030.

Property Impact: Areas near operational and planned metro stations are experiencing accelerated demand. Sarjapur Road and Hebbal are positioned to see significant appreciation. Devanahalli gained a proposed metro extension in the 2025 Karnataka Budget, promising to improve north Bangalore accessibility.

Peripheral Ring Road (PRR)

The Bangalore Peripheral Ring Road, a 73–80 km project being developed at ₹22,600 crores, is undergoing modifications to integrate metro and elevated rail corridors. The redesigned 65-meter wide road will include 6-lane carriageway, service roads, pedestrian pathways, and reserved space for future metro/elevated rail. The remaining 35 meters of the original 100-meter corridor will accommodate commercial development. This project aims to decongest arterial roads and boost peripheral area development.

Satellite Town Ring Road (STRR)

The 280.8 km STRR project, estimated at ₹17,000 crores with 4–6 lanes and 100 kmph design speed, is progressing with an expected completion deadline around December 2025. An 80 km section (Dobaspete–Hoskote) was inaugurated on March 11, 2024. The STRR aims to connect 12 satellite towns including Devanahalli, Hoskote, and Sarjapur, dramatically improving peripheral area accessibility and decongesting the city core.

Airport Connectivity

Kempegowda International Airport expansion and improved northern connectivity via Phase 2B metro depot development are reducing travel times by up to 30% to central areas. These upgrades are significantly boosting demand for North Bangalore residential projects, particularly in Devanahalli and nearby areas.

Major Land Deals & Investment Activity

Recent significant land acquisitions underscore developer confidence in Bengaluru’s periphery:

• Godrej Properties: Acquired 30 acres in South Bengaluru with ₹3,500 crore estimated revenue potential. This followed an October 2025 acquisition of 26 acres at Sarjapur for ₹1,100 crore revenue potential.
  
• Blackstone: Acquiring majority stake in Ritz-Carlton Bengaluru from Nitesh Land, marking continued luxury asset consolidation.
  
• Developer Focus: Developers are aggressively acquiring land in North, East, South, and West peripheral corridors driven by IT growth, airport expansion, metro connectivity, and availability of large land parcels.
  

Q3 2025 saw 12,844 residential unit launches with 7% quarter-on-quarter growth, driven by anticipated festive season demand. North submarket led with 60% launch share, followed by South/South-East (19%) and East (18%).

Market Outlook & Growth Projections

2025–2026 Price Appreciation Forecasts

Experts project moderate-to-strong price appreciation across segments:

• Luxury Housing: 8–10% appreciation
  
• Mid-Income Housing: 5–7% appreciation
  
• 2025–2030 Optimistic Scenario: 10–13% annual growth (assuming faster infrastructure delivery and favorable economic conditions)
  
• 2025–2030 Conservative Scenario: 5–7% annual growth (significant infrastructure delays, economic slowdown, high interest rates)
  

Segment-Specific Forecasts

New launches expected to rise 10–12% in FY26, supported by inventory levels and demand in the ₹2.0–3.5 crore price range. Luxury launches are projected to accelerate, though ultra-luxury sales velocity may slow, potentially leading to measured launches in that category.

Residential Sales Outlook

Bengaluru’s residential sales are projected to grow at 3–5% in FY26, supported by steady demand in mid-income and luxury segments. However, this represents a significant moderation from the 27% CAGR achieved in FY21–FY24.

Critical Challenges & Headwinds

Affordability Crisis

A severe affordability crisis is reshaping Bengaluru’s residential market. The mid-segment (₹45 lakh–₹1 crore) has virtually collapsed, representing just 6% of new launches in H1 2025 compared to historical 35–81% share. Between 2022 and H1 2025, mid-segment sales plunged from 28,270 units to just 5,660 units annually.

Construction costs have surged 40% nationwide, with 5–6% of increases passed to buyers. Even modest price hikes of ₹500–₹800 per sq ft translate to additional ₹5 lakh burden for mid-income families. The income-to-housing cost ratio has deteriorated sharply, with wage growth failing to match property appreciation, particularly impacting IT professionals and the urban middle class.

Excess Inventory & Saturation

Unsold inventory reached 58,700 units (Q1 2025) with 11-month absorption period, creating a buyer’s market but risking market saturation in pockets. Areas like Whitefield and Sarjapur Road face oversupply risks, with developer launches exceeding sales.

IT Sector Headwinds

The tech sector, accounting for 40% of all real estate leasing in 2024, faces headwinds from recent layoffs and hiring freezes. This is dampening buyer sentiment, particularly in northern and eastern IT corridors. While long-term IT sector health remains optimistic, short-term uncertainties are prompting purchase delays.

Infrastructure & Urban Challenges

Chronic infrastructure issues constrain Bengaluru’s investment appeal:

• Traffic Congestion: ORR faces severe gridlock with design capacity breached
  
• Water Scarcity: Persistent water shortages affecting quality of life
  
• Delayed Project Approvals: Construction timeline uncertainties
  
• Urban Mobility: Inadequate public transport in certain zones
  

These challenges have reduced NRI investment inflows and created caution among prospective buyers.

Rising Borrowing Costs

Home loan interest rates currently range from 7.35–9.10%, with potential for further increases dampening sentiment among first-time buyers. Rising rates compound affordability challenges and may increase home loan default risks.

Investment Recommendations by Segment

Short-term (Under 3 Years)

Early Sarjapur-adjacent projects already featuring metro works and select ORR micro-markets offer good near-term appreciation potential.

Medium-term (3–5 Years)

Whitefield extended corridors, Hebbal, and Electronic City projects with possession horizons within this period position investors for steady growth aligned with infrastructure delivery.

Long-term (5+ Years)

North Bangalore corridors (Devanahalli, Bagalur, Hennur) offer exceptional long-term returns driven by airport connectivity, IT park development, and metro expansions. Peripheral warehousing and logistics facilities provide institutional-grade returns of 8–10% yields.

Rental Yield Focus

High-yield opportunities for passive income include Electronic City (4.2–4.8%), Bagalur & Hennur (4.5–5.2%), and Aerospace Park Corridor (4.8–5.5%).

Conclusion

Bengaluru’s real estate market in late 2025 presents a paradoxical landscape: robust long-term fundamentals underpinned by IT growth, infrastructure expansion, and investment inflows, coupled with near-term challenges including affordability crisis, excess inventory, and sector-specific headwinds.

The market continues to reward early investors in peripheral corridors like North Bangalore and emerging office hubs, while traditional luxury markets (Whitefield, Sarjapur) face saturation concerns. Infrastructure catalysts—particularly Namma Metro Phase 3, Peripheral Ring Road, and Satellite Town Ring Road—will likely reshape property values across the city through 2030.

For homebuyers, 2025 represents a buyer’s market with negotiation leverage due to high inventory levels. For investors, targeting high-yield emerging micro-markets and institutional-grade industrial assets remains optimal, though affordability-focused mid-segment investments face severe structural headwinds. Long-term investors benefit from Bengaluru’s resilient economic fundamentals despite near-term moderation in growth rates.

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