Synopsis: The growing real estate market of Bangalore has 49% of mid segment housing and 51% of market share is captured by the high end and luxury housing segment. Even though the mid segment is 2% less it has stable returns and growth rate. This article emphasizes on which segment is better for investment.
The 2025 real estate market in Bengaluru has a surge in price appreciation of residential sales from 5% to 6.5% , a growing demand for luxury co-living, smart sustainable homes and plotted developments fueled by the IT sector, Namma metro and the peripheral ring road has increased the rental prices in Bangalore. The areas like sarjapur, Hebbal and devanhalli are attracting more investment on properties.
The luxury housing segment which holds 51% of market share in the Bangalore real estate market has high return on investment by high net worth individuals, startup founders, NRIs, global buyers and tech professionals. Whereas the mid housing segment captures 49% of the Bangalore real estate market where investment provides stable returns, slow growth and long-term appreciation is expected.
The luxury housing market has higher capital appreciation compared to the mid segment, the properties in the luxury market range over Rs.1.5crore or more and the mid segment ranges between 40-80 lakh rupees. The ultra premium homes increased to 59% year on year with high rental incomes mid segment has higher liquidity and easier resale due to the large pool of buyers.
| Features | Mid Segment Housing | Luxury Segment Housing |
| Growth rate | 15.7% hike in 2025 for overall rental. | 20-25% rental appreciation in 2025 compared to 2024. |
| Demand drivers | Mid income millennials and young professionals, IT corridors, employment hubs. | High Net worth individuals, tech executives, premium large exclusive living space. |
| New Supply | 14% new launch housing projects in 2025 | 86% new launch housing project in 2025 |
| Price points: | 2BHK rental range is 4-7% approx. Rs.30,500-Rs.45,000 in the northern areas of Bangalore. | North and southeast areas range Rs.1.5-Rs.1.65 lakh |
| Key locations | Bangalore midsegments hotspots are electronic city, whitefield Sarjapur and north bangalore | The dominant hotspots are south east, north and south parts of bangalore |
Also read: Top 7 High-End Residential Areas in Bengaluru to Live In 2025
Data of Rentals on Quarterly basis:
- Quarter 1 (as of 2025): 60% mid segment overall launches, luxury high end segment share is 40%, marginal growth is 1-2 %, quarterly its 8-9% on y-o-y basis.
- Quarter 2 (as of 2025): 43% mid segment decreased from last quarter, luxury segment 57% it was at hike from Q1. marginal growth 1-2%, quarterly 7-8% on Y-o-y basis.
- Quarter 3 (as of 2025): 51% mid segment slightly increased from last quarter, 49% for luxury segment, mid segment launches increased by 22%, marginal growth is 1-2%, quarterly share is 6-7% on an annual basis.
Both the segments have growth and demand in the real estate market of bangalore.
Potential policy impact on affordable and mid-segment housing:
- Government support: pradhan mantri awas yojana – urban 2.0 launched sept 2024 provides financial support and subsidies to eligible low and moderate income households.
- RERA improves transparency and ensures timely project completion which is crucial for building trust, for first time home buyers in the mid and affordable segments.
- Tax benefits for home buyers and expected interest rate cuts in 2025 are likely to improve affordability and suitable demand in mid and affordable housing segments.
Projects:
- High end luxury housing market segment: Prestige leela residences and embassy one is known for integrated luxury experience. Other companies like brigade groups, sobha, godrej, birla are giving high end services and amenities.
- Mid housing segment: prestige groups, DS Max SkySanman on bannergatta, provident sunworth, sumadhura capitol, mahaveer cottage are some of the companies working on mid segment housing projects.
Conclusion
The luxury housing market is yielding higher returns and experiencing more demand compared to the mid segment market. The trend is maintained by high net worth individuals, non resident Indians and tech professionals seeking premium, amenity rich properties. The capital appreciation, high rentals on properties are improving and leading the luxury housing segment then the mid housing segment.
Written by Soumya M
