Old vs new Bengaluru: Which neighbourhoods' deliver better returns in 2026

Bengaluru’s housing market grows 13% YoY with 4.45% yields; heritage areas offer stable returns, while HSR, JP Nagar, Rajajinagar drive higher appreciation

Bengaluru’s residential market continues to outperform national peers, recording average rental yields of 4.45 percent—the highest in India—and a 13 percent year‑on‑year price increase, according to Cushman & Wakefield. The city’s property landscape reveals a sharp contrast between heritage neighborhoods such as Basavanagudi, Malleswaram, and Indiranagar, and newer growth corridors like JP Nagar, Rajajinagar, and HSR Layout.

In Basavanagudi, the charm of Old Bengaluru remains intact with independent houses, temples, and bustling Gandhi Bazaar. Limited supply and loyal family tenants have kept vacancies low, driving steady 6 percent annual value growth. The state’s plan for a heritage corridor will enhance cultural appeal but restrict scalability due to low‑rise zoning. JP Nagar, by contrast, is witnessing redevelopment along Bannerghatta Road. With under‑construction stock rising faster than ready units, the locality offers 3–4 percent rental returns from young professionals commuting to Electronic City. Analysts suggest JP Nagar holds stronger long‑term appreciation potential compared to Basavanagudi.

Malleswaram, another legacy hub, benefits from rental stickiness in the ₹28,000–39,000 per month range and 5 percent annual growth. Its schools, markets, and upcoming metro connectivity under Green Line Phase 3 reinforce stability. Rajajinagar, however, is emerging as a redevelopment hotspot. With property values between ₹6,500–8,000 per sq ft and 3 percent yearly growth, brownfield projects and Outer Ring Road connectivity are attracting mid‑segment buyers. CBRE notes that premium launches in the West corridor could push compounded returns to 7–9 percent, giving Rajajinagar an edge in appreciation.

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Indiranagar remains Bengaluru’s premium address, commanding ₹9,000–14,000 per sq ft. Expat demand and lifestyle rents deliver 4–5 percent yields, but limited land supply caps growth at around 2 percent annually. HSR Layout, on the other hand, is scaling rapidly with metro access and strong absorption of 2BHK units by tech workers. Prices here range from ₹6,800–8,000 per sq ft, with 6 percent growth and yields of 4.2 percent. Analysts project 10–15 percent appreciation potential through 2030, making HSR a clear leader among new neighborhoods.

Overall, heritage localities offer stable 5–7 percent growth and low‑risk returns, while newer zones deliver higher yields and stronger appreciation, suiting investors with aggressive portfolios.

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