Bengaluru's Real Estate Market: Luxury vs Ultra-Luxury in 2025
The residential real estate market in Bengaluru is undergoing a significant transformation in 2025, particularly in the premium housing sector. The luxury and ultra-luxury segments are showing distinct growth paths, reflecting a shift in buyer preferences and developer strategies.
The luxury segment, generally ranging from ₹1 crore to ₹5 crore, has seen a surge in demand. In the first half of FY2026, this segment’s share of total residential launches rose to 49%, a substantial increase from 19% in FY2021. This shift indicates a growing trend towards aspirational premium living, moving away from the city’s historical reliance on mid-income housing.
The luxury segment has also experienced a price appreciation of 8-10% in 2025, while mid-income housing growth was only 5-7%. Between January and June 2025, Bengaluru saw the sale of 18,299 homes in the ₹1-5 crore range, accounting for 24% of total homes sold nationally in this price bracket. The average capital value of residential properties in the second quarter of 2025 was ₹7,500 per square foot, a 14.9% increase from the previous year. Premium micro-markets like Sarjapur Road, Whitefield, and Bannerghatta Road have seen even larger price increases.
High-net-worth individuals, technology executives, ESOP-rich professionals, and startup founders are the primary buyers in the luxury segment. They demand large homes, typically between 3,000 to 5,000 square feet, with top-notch amenities. The strong rental appreciation in the luxury segment, projected at 20-25% in 2025 over 2024, makes these properties attractive for both self-use and investment.
In contrast, the ultra-luxury segment, which includes homes priced over ₹5 crores and particularly those above ₹10 crores, has experienced a decline. For the first time, the sale of homes above ₹10 crores crossed the ₹1,000 crore mark in FY2025, with 78 units sold—a 59% increase from 51 units in FY2024. However, the momentum has not continued into 2025. A report from ICRA in November 2025 highlighted a phase of reduced sales for ultra-premium dwellings, leading to a more cautious approach from builders.
The slowdown in the ultra-luxury segment is attributed to the limited number of potential buyers willing to invest at extremely high price points. These buyers, typically ultra-high-net-worth individuals (ultra-HNIs), have very specific demands, and the high maintenance and operational costs associated with ultra-premium properties further restrict the market. Despite this, the ultra-luxury segment continues to attract CXOs, global Indians, and non-residents, though the market has become highly selective and dependent on existing inventory. Hebbal, one of the top micro-markets for ultra-luxury apartments, claimed 22% of the total value of ultra-luxury sales in FY2025.
When comparing the two segments, the luxury segment has a broader market share, with 49% of total residential launches in H1 FY2026. The ultra-luxury segment, while smaller, saw 78 units sold above ₹10 crores in FY2025, a 59% increase over FY2024. The luxury segment has experienced robust price appreciation and rental yields, making it an attractive investment. In contrast, the ultra-luxury segment is facing market consolidation and a more cautious growth trajectory due to its niche demand and higher transactional costs.
In conclusion, Bengaluru’s luxury real estate segment is outperforming the ultra-luxury sector in 2025, driven by strong demand and higher transaction volumes. The luxury market is capitalizing on a diverse and expanding buyer base and continuous price appreciation. Conversely, the ultra-luxury segment is experiencing slower sales and cautious developer activity due to its smaller market size and specific buyer requirements.
