Tech wealth and Bengaluru property: is the playbook changing?

Summary

A surge in startup exits and stock gains fuelled Bengaluru's premium housing boom from 2021 to 2024. Now, slowing price growth and tech sector headwinds are prompting buyers to rethink the equity-to-property playbook.

When Shreyas Nair, 33, sold a company he built which helped other startups scale from zero to $10 million in revenue, the proceeds left him heavily concentrated in equity. In 2025, he decided to put some of that wealth into an under-construction project in East Bengaluru with handover expected in March 2027.

The purchase followed the boom between 2021 and 2024, when rising technology stocks, salary increases and startup liquidity events delivered windfalls for some employees in the technology sector. Many used this money to convert equity-linked savings into tangible apartments in Bengaluru, a major technology and startup centre in India.

The timing proved favourable as the housing market recovered from the pandemic led slowdown after 2021 and home loan rates near historic lows improved affordability. According to Anarock Research & Advisory, the city’s average quoted base selling price rose about 60%, from ₹5,217 per sq ft in 2021 to ₹8,380 per sq ft at the end of 2024.

However, that dynamic is shifting. With property prices already stretched, mounting AI-related job uncertainty, cooler stock market returns, and a drop in employee stock option (Esop) liquidity events, does this real estate strategy still hold up?

How the 2021–24 cycle worked

One factor that boosted the appeal of residential property was the opportunity to reinvest eligible capital gains into a home under Section 54F of the Income Tax Act, subject to specific conditions. This option was particularly relevant for investors who had monetized shares, Esops or other capital assets, according to Sougata Basu, founder of CashRich.

The provision allows an exemption on eligible long-term capital gains when the net sale proceeds from specified assets are invested in a residential property in India, subject to conditions. Effective April 2024, the maximum investment eligible for calculating this exemption has been capped at ₹10 crore.

“In 2021, technology salaries, venture capital funding and Esop liquidity all peaked together. That provision made luxury apartments a common destination for exit proceeds,” Basu said.

Post-pandemic, pent-up housing demand and low interest rates converged with record compensation in tech. Strong demand for talent drove up salaries, while a wave of startup buybacks, secondary sales, acquisitions, and listings allowed employees to cash out Esops. In 2021, Indian tech startups raised a record $38.3 billion, according to Tracxn data.

Beyond unlisted startups, the post-pandemic rally in listed tech stocks sharply boosted the value of restricted stock units (RSUs), particularly for employees at global tech giants. Unlike Esops, which give employees the option to purchase shares at a set price, RSUs are actual shares granted outright that vest over time, meaning their payout rises directly with the company’s stock price.

For employees catching all these tailwinds at once, the math was simple: higher salaries covered larger home loans, surging RSUs swelled net worth, startup equity turned into liquid cash, and Bengaluru real estate kept appreciating.

Why the equation is changing

However, Basu doubts these ideal conditions will recur anytime soon, noting that AI is set to commoditize routine coding and weigh on tech pay over the coming years. He breaks luxury-home buyers into three key groups facing distinct headwinds:

• investors turning financial gains into physical real estate;
• NRIs navigating shifting tax rules and currency swings; and
• tech employees whose equity-heavy pay packages are far less predictable than fixed salaries.