Is Bengaluru's Real Estate Market Overvalued in 2026?

Bengaluru is the technology powerhouse of the country, which attracts migrants, multinational corporations, and high-income workers. This development has driven the housing demand and the price of houses to new highs, especially in the big IT corridors. Luxury apartments continue to sell, but home ownership is steadily slipping away from middle-class buyers. This makes it an essential argument: is the housing market in Bengaluru overvalued, or is it just that a big part of the population cannot afford it? Understanding this distinction is essential to evaluating the true condition of the city’s real estate market.

The rise in prices has been gradual and closely linked to the city’s emergence as India’s technology and startup hub. The availability of large IT parks, multinational offices, and the creation of more job opportunities attracted lakhs of migrants to the city. Whitefield, Electronic City, and Sarjapur Road, once peripheral zones, have evolved into major residential hubs.

As each new job was created, new housing demand grew. The expansions of the Metro, improved roads, social infrastructure such as schools and malls also gave an added value. Due to the constant growth in demand, the prices were steadily increasing as opposed to the sharp increase in prices which were speculative.

Who Buys Premium Homes?

Premium housing demand in Bengaluru is concentrated among financially strong buyer groups:

- Senior IT professionals – who earn between 30 lakh to 1 crore per year in product and global tech companies, make up a large proportion of the purchasers of the projects that require above 1 crore and in areas such as Whitefield and Sarjapur Road. - Startup founders & early employees – ESOP buybacks and startup exits have created a new class of young millionaires. Most of them move out of rentals and move to luxury gated communities. - Corporate officers CXOs and top managers – will want larger houses with luxury amenities and mostly in established neighbourhoods or in the upscale developments near the Outer Ring Road. - Non-Resident Indians (NRIs) – NRIs are estimated to be making around 15-20% of the sales in some of the high-end projects. To them, the prices of Bengaluru are lower than those of global cities and hence buying is appealing. - High-net-worth investors – Most of them purchase multi-unit deals with anticipated returns of renting out the building to the large professional population and the long-term capital growth.

These groups can bear an increase in prices which an average household cannot, since they earn much higher income than what is the median income in the city.

Why Prices Appear Affordable to Certain Buyers

To high-end consumers in Bengaluru, current prices may still appear reasonable because:

- The residential prices have increased by approximately 70-80% since 2020, which brings confidence that the price of property would continue to appreciate. - Increased income – Tech-sophisticated seniors and founders generally receive incomes of 30 lakh and above per year, making EMIs easier to manage. - NRI benefit – The conversion of currency in dollars or euros into other currencies enhances purchasing power, making homes appear cheaper than in foreign markets. - Investment spirit – Buyers are hoping for capital growth as well as consistent tenancy of the large professional population representing the city. - Infrastructure push – Metro development and employment gains indicate that the values will increase in the future.

Overvalued or Just Unaffordable?

Homes in Bengaluru may be expensive, but that does not necessarily mean the market is overvalued. Overvaluation takes place when the prices escalate in the absence of demand or due to speculation. Conversely, numerous projects within major corridors are posting consistent sales, with help of growth and migration.

The division is the very matter of affordability. The growth in property prices has outpaced income growth to a significant proportion of the population, particularly first-time buyers. Although middle-income earners can still afford houses, the high-income earners will have to relocate to areas or delay ownership. Thus, the strain many feel stems more from unequal purchasing power than from an unsustainable bubble.

Conclusion

Employment growth, migration, and strong investor confidence continue to support the market, making a sharp correction unlikely. However, the increasing prices have evidently become unaffordable to a large percentage of the households. It is possible that the market is not irrationally overpriced, but it points to an increasing affordability gap that will define the future of the housing market in the city.