Baku's development: urban renovation and tourism appeal as drivers of the real estate market

Baku continues to undergo rapid transformation, shaping a modern urban environment that meets international standards of quality of life. As part of the capital’s Master Plan, large-scale projects are underway to modernize the city’s infrastructure: 

• old housing is being demolished;
• modern residential complexes are being built;
• new public spaces are being created, including parks, waterfronts, and pedestrian zones;
• social infrastructure is being developed. 

Particular emphasis is placed on creating a comfortable and harmonious urban environment with well-developed transportation access and green spaces. These transformations not only improve living conditions but also directly influence the growth of real estate values. New projects become centers of investment attraction and provide long-term capitalization potential.

At the same time, Baku is strengthening its position as one of the region’s key tourist destinations. The growing number of international events — ranging from business forums to cultural festivals and sporting events — drive an increase in tourist traffic and the active development of the short-term rental market. 

In 2026, the capital of Azerbaijan will host a number of significant international events, which will naturally increase occupancy rates at hotels and apartments. Between 2023 and 2025, the number of tourists increased by 30% compared to 2022, reaching approximately 2.6 million people annually, and in early 2026, this growth continued, rising by an additional 5.3% compared to January of the previous year.

The rise in tourism activity has a complex impact on the real estate market: 

• the returns on investment properties increase;
• the hotel apartment segment develops rapidly;
• the appeal of central and coastal areas grows;
• interest from foreign investors intensifies. 

With the expansion of tourism infrastructure, real estate in Baku is increasingly viewed not only as a means of preserving capital but also as a source of stable rental income, particularly in premium coastal locations and large-scale projects such as Sea Breeze.