Bengaluru Ranks 4th in Global Luxury Real Estate
Knight Frank's Prime Global Cities Index Q2 2025 shows Bengaluru as the 4th fastest-growing prime residential market with a 10.2% annual price appreciation. This leap places India's tech hub ahead of traditional luxury cities like London and Paris, behind only Seoul (25.2%), Tokyo (16.3%), and Dubai (15.8%) in the 46-city tracker.
Understanding Bengaluru's Market Surge
Three main factors explain this growth:
- Digital Wealth Boost: IT expansion and startup valuations have created over 15,000 new millionaires since 2023, directly fueling luxury demand.
- Limited Supply: Less than 3% of residential stock qualifies as 'prime' in areas like Indiranagar and Whitefield.
- International Talent: Multinational senior execs in Bengaluru have boosted property demand, the highest among Indian metros.
Shishir Baijal, Chairman of Knight Frank India, sees it this way: *"Bengaluru's unique mix of tech-driven wealth and mature infrastructure has created a luxury market unlike any other emerging economy. We're seeing Silicon Valley-style wealth creation meeting Asian urbanisation trends."
Indian Cities Defy Global Slowdown
While global prime property growth slowed to 2.3% annually (down from 3.5% in Q1), Indian metros showed strong resilience:
| City | Global Rank | Annual Growth |
|---|---|---|
| Bengaluru | 4th | 10.2% |
| Mumbai | 6th | 8.7% |
| Delhi | 15th | 3.9% |
This outperformance comes from sustained infrastructure investments, like Mumbai's coastal road project and Delhi's metro expansions and pent-up demand from returning NRIs seeking lifestyle upgrades.
Strategic Implications for Investors
Liam Bailey, Knight Frank's Global Head of Research, notes changing investment patterns: *"Stable borrowing costs have redirected capital toward high-growth emerging markets. Bengaluru's 10%+ appreciation and 75% rental occupancy create a compelling risk-return profile."
Key opportunity zones include:
- Koramangala's renovated heritage properties
- Outer Ring Road's integrated townships
- Devanahalli's upcoming luxury enclaves near the new airport
Future Outlook
With Phase 3 of the Bengaluru Metro connecting key employment hubs by 2026, access to prime corridors will improve. However, developers face challenges in land acquisition and regulatory approvals, likely limiting premium supply through 2027. This scarcity, combined with India's growing millionaire population (projected to grow 120% by 2030), suggests sustained pricing momentum in Bengaluru's luxury segment—making it a strategic bet for global capital seeking countercyclical opportunities.