Bengaluru Real Estate Logs 4Th Spot In Global Prime Cities Index

Bengaluru's prime residential market is making headlines with a robust 10.2 per cent annual price growth, placing it 4th globally in Knight Frank's Prime Global Cities Index (PGCI) for Q2 2025. The city's performance underscores its emergence as a key player in the global luxury real estate landscape, outpacing traditional Indian heavyweights like Mumbai (8.7 per cent) and Delhi (3.9 per cent).

In comparison, Dubai, ranked 3rd, posted a 15.8 per cent annual growth, continuing its strong run driven by international investor interest and high-net-worth migration. While Dubai maintains a lead, Bengaluru's consistent upward trajectory signals a maturing market with increasing global relevance.

What's driving Bengaluru's growth?

Tech-driven wealth creation: The city's booming IT and startup ecosystem continues to fuel demand for high-end housing.

Supply constraints: Limited inventory in prime districts is pushing prices upward.

Investor confidence: Bengaluru is increasingly seen as a stable, long-term investment destination.

On a quarterly basis, Bengaluru recorded a 1.6 per cent rise, indicating sustained momentum despite global headwinds such as delayed interest rate cuts and tighter financing conditions.

“Bengaluru's property market is on a strong upswing. Homebuyers and investors are showing renewed confidence, with demand fuelled by better connectivity through the expanding metro and large-scale projects like the upcoming Aerospace Park in North Bengaluru. The city also set a new benchmark in H1 2025, clocking 18.2 million sq ft of office absorption-over half led by GCCs [global capability centres] - reflecting its growing global stature. Together, infrastructure, jobs, and lifestyle are shaping Bengaluru into a thriving hub for both living and working,” Sankey Prasad, CMD, Colliers India & Middle East, told Khaleej Times.

A key factor is the recent price surge is the Bengaluru Aerospace Park, which is significantly boosting property prices in its surrounding areas, especially in North Bengaluru localities like Devanahalli, Bagalur, and Shettigere. The park's development, alongside the KIADB Aerospace SEZ and upcoming infrastructure like the Namma Metro and Satellite Town Ring Road, is attracting global investors and high-income professionals. This surge in demand is driving up land and apartment prices-plots have appreciated over 20 per cent CAGR in recent years. The influx of aerospace and IT companies is also creating job opportunities, further fueling residential and commercial real estate growth. As connectivity improves and the region transforms into a business and tech hub, property values are expected to continue rising steadily, analysts say.

Pre-launch allotment prices last week after calling expression of interests in an upcoming project in North Bangalore, near the Kempegowda International Airport, are reflective of this trend, with one bedroom apartments going for nearly Rs10 million (Dh416,000), compared to around Rs6 million about three years earlier. Another local developer, Sattva, recently announced its new project, Shettigere, situated near Sadahalli - BK Halli Road, where studios are starting from Rs6.3 million, going up to Rs86 million for four-bedroom penthouses.

Dr. Prashant Thakur, Executive Director & Head – Research & Advisory, ANAROCK Group, noted that Bengaluru's residential real estate market is undergoing steady growth, with infrastructure development being its main growth catalyst.“The Namma Metro Phase 2 and 3 expansions and the Peripheral Ring Road will certainly cause property values to increase and also give rise to fresh growth corridors, most notably around Sarjapur Road and Kanakapura Road extensions. These upgrades will push housing demand towards the peripheral micro markets that balance affordability and connectivity to employment hubs,” he told Khaleej Times.

Key micro markets like Sarjapur-Attibele, Electronic City-Chandapura, and extended Whitefield areas toward Kannamangala and Hoskote are witnessing robist sales. North Bengaluru locations like Devanahalli, Bagaluru, and Doddaballapur benefit from their proximity to the airport, and corridors along the suburban rail network are now becoming more affordable alternatives with considerable growth potential. Lower land costs and well-planned infrastructure upgrades provide these areas robust long-term growth potential.

“Thanks to strong IT growth, startups, and infrastructure investments, Bengaluru will witness modest price appreciation over the next 2–3 years. It will remain end-user driven and speculative demand is not a major factor,” Thakur added. ANAROCK Research data indicates that Bengaluru added 36,200 units in H1 2025 (up 11 per cent from H1 2024), while sales fell 12 per cent to 30,120 units, and average prices rose 12 per cent year-on-year to Rs8,720 per sq. ft.

Dubai: A magnet for global capital

Dubai's real estate market remains buoyed by tax-friendly policies, Golden visa programmes, along with strong international demand, especially from Europe and Asia.

Dubai's five-year growth stands at a staggering 107 per cent, second only to Tokyo (120 per cent), reflecting its transformation into a global luxury hub.

However, in quarterly growth Bangalore even pipped Dubai clinching the third position, Knight Frank data showed.

Outlook: Diverging paths, shared strengths

While both cities are thriving, their trajectories differ, analysts say.

Bengaluru's growth is largely domestic and tech-sector driven, with increasing interest from NRIs and institutional investors.

Dubai's surge is more globally influenced, tied to geopolitical shifts and wealth migration.

Knight Frank's global head of research, Liam Bailey, notes:“Prime markets are taking a collective breath. The recovery we've seen was aided by expectations of lower borrowing costs. With that timeline now pushed out, a cooling in price growth is inevitable.”

Yet, cities like Bengaluru and Dubai are defying the trend, thanks to strong fundamentals and unique market dynamics.

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