Bengaluru is adding homes, but the new supply is increasingly concentrated in price bands that are out of reach for a large section of the city’s buyers. Data cited from Cushman & Wakefield and Anarock Research shows that the central problem is no longer only how many homes the city builds, but what kind of homes the market is producing.
The shift is visible in the launch mix. Cushman & Wakefield’s analysis shows that high-end and luxury homes accounted for 68% of residential launches in Bengaluru in the first quarter of 2026, while affordable housing represented just 1%. In the second quarter, there were no affordable launches under that consultancy’s classification. High-end and luxury homes accounted for 58% of launches, while the mid-segment made up the remaining 42%.
Anarock Research records the same direction using a different definition. It classifies affordable housing as homes priced below Rs 40 lakh. Under that threshold, affordable homes accounted for 5% of new supply in the first quarter and 4% in the second. The largest share of launches in the second quarter, at 43%, was in the Rs 80 lakh to Rs 1.5 crore bracket.
The differing definitions make direct comparison difficult, but they do not change the broad conclusion. Bengaluru’s housing supply is moving up the price ladder. A market can therefore report a sizeable volume of new launches while still failing to provide enough homes for households whose incomes do not match the prices being offered.
That distinction matters because supply is often treated as a single number. The launch of a residential project adds to the city’s housing stock, but it does not automatically improve access for all income groups. The evidence in the report indicates that the composition of supply has become as important as its volume. Homes priced beyond the purchasing capacity of many households cannot resolve a shortage that is defined by affordability.
Prices have been rising alongside the change in supply. Cushman & Wakefield recorded a 6-7% year-on-year increase in Bengaluru’s capital values in the second quarter of 2026. Anarock Research reported an average quoted rate of about Rs 9,450 per square foot. These figures describe a market in which the cost of acquiring a home is increasing even as developers continue to bring new projects to market.
The upward movement in prices is closely connected to the economics of land. Anarock estimates that land values in Bengaluru rose by 60-120% between 2021 and the first half of 2026. The sharpest increases were recorded in established and infrastructure-led corridors, where demand and improved connectivity can raise land values before a project is launched.
Land is a critical distinction in understanding housing costs. Construction costs and land costs are separate components, and a rise in either affects the price at which a project must be sold. When land becomes significantly more expensive at the beginning of the development process, a project has less room to absorb other cost increases while remaining financially viable.
The available data does not establish that land prices alone caused the decline in affordable launches. It does, however, show that land has become substantially more expensive in the same period in which the market has moved towards higher-ticket housing. That relationship helps explain why developers may find lower-priced projects harder to structure, particularly in locations with strong demand and infrastructure access.
Construction costs have also moved higher. Across India’s top seven cities, including Bengaluru, Anarock estimates that the average cost of constructing a standard-plus residential project increased 34%, from Rs 2,681 per square foot in 2021 to Rs 3,604 per square foot in 2025. Over the same period, average residential capital values rose 59%, from Rs 5,826 to Rs 9,260 per square foot.
The comparison shows that selling prices and construction costs have not moved at the same rate. But the figures must be read carefully. The construction-cost estimate does not include land, making it incomplete as a measure of the final cost of a home. Once land, financing, approvals, project overheads and other development expenses are added, the price required to make a project viable can be considerably higher than the construction component alone. The supplied data does not quantify those additional components.
The cost pressure is not limited to the structure itself. Anarock estimates that disruptions linked to the Middle East added another 8-10% to construction costs, with steel and fuel-linked logistics among the sharpest movers. Steel prices were estimated to be about 20% higher, while fuel and site logistics increased by 15-20%.
Labour remains the largest single cost component, accounting for roughly 25-30% of project costs, although its increase was more moderate at 5-6%. This creates a mixed cost picture. Labour is the largest individual component, but land, steel, fuel and logistics can each alter the total economics of a project. The result is not simply a general increase in the price of construction; it is a development model exposed to several distinct sources of cost escalation.
For housing policy, the distinction between these cost drivers is important. A scheme aimed at improving affordability would need to account for more than construction materials. If land values rise rapidly in the locations where households want to live and where employment is concentrated, lower construction costs alone may not produce homes within reach of those households. Conversely, measures that address land without accounting for steel, logistics and labour may also have limited effect.
Bengaluru’s infrastructure-led corridors illustrate the tension. Better-connected areas are more attractive to residents and developers, but the report notes that infrastructure improvements can push up land values even before a project is launched. Connectivity can therefore improve access to jobs and services while also increasing the cost of housing near those improvements.
This creates a central urban trade-off. The locations that offer the greatest practical value to residents—proximity to office corridors, transport links and established services—can become the locations where land is most expensive. If new homes in these areas are predominantly high-end, the benefits of urban investment may be captured through higher property values rather than broader access to housing.
The consequences also extend to the rental market. As buying becomes more difficult, renting is not necessarily providing a cheaper alternative in Bengaluru’s job-rich corridors. Cushman & Wakefield reported a 6-7% year-on-year increase in citywide rents in the second quarter of 2026, driven by demand for rental apartments around prime office corridors.
The rental data does not show that every neighbourhood has experienced the same increase, nor does it establish how rents compare with household incomes. It does show that both ownership and rental markets are facing upward pressure in areas linked to employment. For households unable to buy, the cost of remaining close to jobs is also rising.
This is why Bengaluru’s housing issue cannot be assessed through launches alone. A high number of new units may indicate strong construction activity, but it does not answer whether workers can afford to live near employment, whether tenants can remain in job-rich corridors or whether lower- and middle-income households are being pushed towards areas with longer commutes. The supplied figures establish the price and supply trend, but do not quantify displacement, commuting distances or household affordability ratios.
The evidence does establish three linked movements: affordable homes form a small share of new launches, land values have risen sharply, and construction and housing prices have increased. It also shows that rental demand and rents are rising around prime office corridors. Together, these trends describe a housing market where the city is building, but the market is not producing the same mix of homes that all sections of its workforce require.
The immediate policy question is therefore not only how to increase housing supply, but how to shape its location, price and tenure mix. The report does not provide details of a specific government intervention, affordable-housing programme or regulatory change. It also does not establish whether the low affordable-launch share reflects weak demand, high land costs, developer economics, limited incentives or a combination of these factors. Those questions require further evidence from planning authorities, developers, financiers and household-level data.
For now, the numbers point to a clear structural concern. Bengaluru’s housing market is expanding in volume while becoming less accessible at the lower end. Rising land and construction costs help explain the pressure, but the outcome is visible in the launch composition: high-end and luxury homes dominate new supply, while homes below the affordable threshold remain marginal.
The next developments to watch are changes in the price composition of launches, land values in infrastructure-led corridors, construction-cost movements and rents near major employment centres. Those indicators will show whether Bengaluru’s housing market begins to broaden its supply or continues to move further upmarket.
