Bengaluru's Luxury Housing Market Faces Challenges Amid Economic Uncertainty

Bengaluru's luxury housing market is experiencing a slowdown as developers offer flexible payment schemes and discounts to attract buyers amid rising job losses and economic uncertainty.

Luxury HousingReal EstateBengaluruJob LossesEconomic UncertaintyReal Estate NewsAug 02, 2025

Bengaluru's Luxury Housing Market Faces Challenges Amid Economic Uncertainty

Real Estate News:Once considered immune to demand swings, Bengaluru’s luxury housing market is showing signs of softening, buyers say. Amid rising white-collar job losses and economic uncertainty, some top developers are offering flexible payment schemes like 25:75 and upfront discounts, deals that were once rare in the ₹2.5 crore-and-above segment.

Several developers are offering 25% upfront payment, with the remaining 75% due on possession. One buyer wrote on Reddit, “Were there similar kinds of offers 6 months ago as well? Why are they providing such enticing offers if 'all is well?'” This comes at a time when home sales in Bengaluru declined by 8% year-on-year in Q2 2025, dropping to 15,100 units from 16,350 a year ago, even as average property prices jumped 12%, according to ANAROCK data.

After a period marked by aggressive launches and record sales, developers are now exhibiting a more cautious and quality-focused approach. In Q2 2025, the emphasis has noticeably shifted to completing ongoing projects and refining delivery standards rather than aggressively adding to supply, Anuj Puri, chairman of ANAROCK Group, said.

Experts say that they are beginning to see some developers recalibrate their offerings, not in a drastic way, but enough to cater to a wider range of buyers. Some are shifting toward mid-premium segments to make homes more accessible. For example, Bengaluru-based Prestige Group is planning to shift focus to the mid-market housing segment in the ₹2 to ₹3 crore range to tap into growing demand from salaried homebuyers seeking quality homes in FY25. “The pivot this year is a conscious move towards mid-segment housing, which continues to see strong demand, especially in tech-driven cities like Bengaluru and Hyderabad,” Praveer Srivastava, senior vice president at Prestige Group, previously told HT.com.

According to Nomaan Ellahi, associate principal partner at Square Yards, this shift is not necessarily due to a collapse in demand. Instead, it’s a response to changing buyer behavior. “Post-COVID, homebuyers, especially NRIs and HNIs, are looking for not just bigger homes, but better amenities. These are typically available only in projects priced ₹3 crore and above. However, in the last year or so, financial caution has increased, especially with worries of layoffs and tech sector stress.”

Since early 2024, major global firms such as Intel, Microsoft, and Tesla have announced large-scale layoffs aimed at cutting costs and improving operational efficiency. Simultaneously, the rapid rise of automation and artificial intelligence is reshaping the IT employment landscape, shifting demand toward specialized skills in emerging technologies. While this transition is opening up new job avenues in advanced tech sectors, experts note that it has also led to a slowdown in hiring for conventional IT roles.

Recently, Tata Consultancy Services (TCS) announced plans to trim its workforce by 2% in the 2026 financial year, translating to over 12,000 job cuts. Experts warned that this could mark the beginning of a broader shift, particularly in tech-driven housing hubs like Bengaluru.

Vivek Rathi, head of research at Knight Frank India, noted that the decision-making cycle for homebuyers in the premium segment has grown significantly longer. “Wealth creation has slowed amid financial insecurities driven by the global slowdown, and that affects homebuying confidence. Buyers today are more deliberate; they want to explore all available options, negotiate better deals, and find the ‘right’ product before closing.”

Even with robust sales momentum over the past 2–3 years, inventory levels have built up. “It now takes about 2 to 2.5 years to absorb available inventory in many areas,” Rathi said. “It’s not a broad-based supply-demand mismatch, but in pockets like the IT corridor, oversupply and aggressive pricing, particularly from Grade A developers, are creating hurdles.”

Experts said Whitefield, once a star performer in the city’s luxury real estate landscape, is a case in point. “In some cases, Grade A developers are pricing homes ₹1,000 per sq ft above the market average,” said Ellahi. “When inventory runs into the thousands, such pricing becomes difficult to sustain.”

Experts pointed out last year that several Grade A developers launched projects in Whitefield and the southern IT corridor of Electronic City. “However, sales momentum in Whitefield was slow, likely due to pricing being on the higher side. That may be one reason why many developers are now expected to focus more on the mid-segment going forward. Still, the luxury segment remains important, offering developers both higher margins and a way to elevate their brand positioning,” Ellahi said.

In contrast, experts point out prime locations like Indiranagar, Koramangala, and HSR Layout, which have seen consistent luxury demand. “Most developers launching projects in such areas opt for limited units, making the offerings more exclusive and premium, often priced in the ₹2–4 crore range. Beyond ₹4 crore, we’re seeing significant traction from HNIs, NRIs, and even buyers from other parts of Karnataka, including neighbouring states like Telangana,” Ellahi said.

Experts agree that the ₹80 lakh to ₹1.5 crore price band remains the most resilient. “This bracket is driven by salaried professionals with ₹10–15 lakh annual CTCs,” Ellahi said. “The issue is that there isn’t enough quality supply in this segment, and it’s forcing some buyers to either wait or stretch their budgets into higher-risk territory.”

Despite current headwinds, developers are unlikely to abandon the luxury segment altogether, experts say. Luxury helps build brand visibility and attracts marquee buyers, they said. “Moreover, demand from Global Capability Centres (GCCs), which are steadily expanding their footprint in Bengaluru, is offering a cushion against declining IT-led demand.”

He said that while IT job insecurity has slowed certain market segments, GCCs are showing long-term commitment to real estate. Their need for housing is helping maintain a base level of demand in key luxury corridors. “If you look at the ₹3 crore home buyer segment, we’re essentially talking about households with at least ₹50 lakh in annual income. There are people in Bengaluru who meet this benchmark,” Rathi said.

He pointed out that much of the demand in this segment is upgrade-driven, people who are looking to move into better homes. “Another important point is that buyers now have access to other income sources like equity investments, which serve as a support system and are currently not under too much stress.”

Frequently Asked Questions

What are the signs of a softening luxury housing market in Bengaluru?

Developers are offering flexible payment schemes like 25:75 and upfront discounts, which were once rare in the ₹2.5 crore-and-above segment. Home sales have also declined by 8% year-on-year in Q2 2025.

Why are developers offering these enticing deals?

The deals are a response to rising job losses, economic uncertainty, and a longer decision-making cycle among buyers, which has led to a slowdown in demand and increased financial caution.

How are developers recalibrating their strategies?

Some developers are shifting focus to the mid-premium segment to make homes more accessible, while others are completing ongoing projects and refining delivery standards.

What impact have tech layoffs had on the real estate market?

Tech layoffs have increased financial caution among buyers, slowed certain market segments, and led to a longer decision-making cycle, particularly in the luxury segment.

Which areas in Bengaluru are still seeing strong luxury demand?

Prime locations like Indiranagar, Koramangala, and HSR Layout are seeing consistent luxury demand, with developers launching limited units to maintain exclusivity and premium pricing.