All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.
Yes, the analysis of Dar es Salaam's property market is included in our pack
Thinking of buying a property in Dar es Salaam? You're not alone!
Many people are fascinated by Dar es Salaam's coastal beauty and dream of owning a beachfront property or a modern apartment in this city.
Does it make sense from a financial perspective, though? Are property prices increasing in Dar es Salaam? What is the current trend? Should I buy property in the City Centre or Masaki? Is there any hidden tax? Where can you get a rental yield above 7%?
We have all the answers you need.
The BambooRoutes team knows this market like the back of their hand. As a matter of fact, we've put all our findings together in a pack. Get it now.
In the lines below, we'll provide you with helpful information.
How is the real estate market in Dar es Salaam?
What's the current state of the property market? Data will give us the insights we need.
Types of properties
In Dar es Salaam, you can find various types of properties for sale, including apartments, houses, villas, condos, and commercial spaces.
Apartments are often located in multi-story buildings and offer different sizes to accommodate varying needs. Houses and villas provide standalone living spaces with yards or gardens, suitable for families or those seeking more privacy. Condos offer a mix of apartment-style living with shared facilities like pools and gyms.
Commercial spaces encompass offices, shops, and warehouses for business purposes.
So, whether you're looking for a cozy apartment or a spacious house, Dar es Salaam offers a range of property options to suit different preferences and needs.
Buying or renting?
(In case you want it for yourself, not for rental purposes)
If you're moving to or already residing in Dar es Salaam, Tanzania, you might be pondering whether to invest in a property or opt for a rental accommodation.
Without a doubt, it's better to buy if you want to start building equity and have the potential to make a return on your investment.
One data can help you make a decision - the property price-to-rent ratio. You can use this number to see how long it will take to recover the property's cost through rental earnings.
According to Numbeo, the property price-to-rent ratio in Dar es Salaam is around 45.17, which is very high.
In a booming market with rapidly appreciating property values, buying might still make sense despite a high price-to-rent ratio. Is it the case in Dar es Salaam? We will look at that.
Property prices in Dar es Salaam
On average, according to the last data from National Bureau of Statistics (NBS), purchasing a property in Dar es Salaam should cost you around $3,820 per square meter.
Of course, there are noticeable differences. The value of a square meter for a luxury apartment in Dar es Salaam might differ from a suburban house in Mikocheni. We actually offer a more in-depth analysis in our pack for buying property in Dar es Salaam and in Tanzania.
To put things in perspective, it is 5 times less than the property prices in the center of New York.
However, housing prices in Dar es Salaam are higher (18%) than in Maputo.
The most expensive neighbourhoods in Dar es Salaam are probably Masaki, Oysterbay and Msasani, while the cheapest are likely Temeke, Ilala and Ubungo.
Trends
First and foremost, we have to acknowledge that Tanzania is, today, a relatively stable country. The last Fragile State Index that has been reported for this place is 78.2.
Keep this in view when pondering the viability of buying a property in in Dar es Salaam.
If we look at more data, we can see that, according to the IMF’s forecasts, Tanzania's economy is expected to soar by 28.1% in the coming 5 years, resulting in an average GDP growth rate of 5.6%.
If you intend to invest in real estate in Dar es Salaam it's a good thing because it means richer citizens, more demand for the housing market, less default on mortgages, better services, etc.
Also, in Tanzania, the average GDP per capita has changed by 4.5% over the last 5 years. Despite being minimal, there is still some observable growth.
According to this data point, property prices in Dar es Salaam might go higher in 2024 and also later on.
Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Tanzania right now.
Buying property in Dar es Salaam
It can be difficult to buy property in Dar es Salaam due to the lack of reliable and up-to-date information available. That's why we have created the pack to buy property in Dar es Salaam and in Tanzania.
Buying process
In our pack, we've explained the entire process of buying properties in a detailed way. We've pointed out the mistakes to steer clear of, shared tips for finding properties that give you the best returns, and provided information about taxes and necessary documents.
Now, we're giving you a simplified version of the buying process.
This is the step-by-step process to purchase a property in Dar es Salaam:
- Research the property market and set a budget for properties in Dar es Salaam.
- Engage a licensed real estate agent with expertise in the local market.
- Conduct property inspections and verify documents like the Certificate of Occupancy and Building Permit.
- Negotiate the price and terms with the seller or their authorized representative.
- Draft a sales agreement with legal assistance, including specific terms required by Tanzanian law.
- Sign the sales agreement and pay the deposit, ensuring a proper receipt is issued.
- Obtain a title search and verify property ownership at the local Land Office.
- Apply for a land survey and valuation report, performed by a licensed surveyor.
- Secure financing or payment arrangements, adhering to local banking regulations.
- Complete property registration at the Land Office, providing necessary documents like the Tax Identification Number (TIN) and residence permit.
- Pay the remaining balance and transfer ownership through a legal process, involving the Tanzania Revenue Authority and local authorities.
- Obtain the title deed (Title Certificate) as proof of ownership, issued by the Commissioner of Lands.
Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Tanzania.
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Where to find a property
Discover these websites to find properties in Dar es Salaam:
- RE/MAX - A real estate platform offering a wide range of properties for buying, selling, and renting in Tanzania.
- JR Real Estate Dealers - A leading real estate agency in Tanzania, providing a diverse range of properties for sale and property management services.
- Ngata Homes Africa Ltd - NGATA HOMES is a digital platform in Tanzania assisting first-time homebuyers in qualifying for affordable mortgage loans through a rent-to-own program.
- ExpatExchange - Expat Exchange is a valuable resource for expats in Tanzania, offering information on real estate, healthcare, visas, and community connections.
- Knight Frank - Knight Frank is a global real estate agency providing property services, including buying, selling, rentals, and commercial business brokerage in Tanzania and beyond.
Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Tanzania.
Which properties for which budget?
As mentioned before, the average price per sqm in Dar es Salaam is $3,820. If you're interested in a one-bedroom property spanning 60 square meters, it would be around $229,000, while a two-bedroom with 85 square meters would be approximately $325,000.
However, as you can guess, property prices will differ based on the attributes of the property and its specific location.
Expect property prices to be on the higher side in the premium areas of Dar es Salaam. For instance, you might find an apartment in Masaki priced at approximately $440,000, whereas a property in Oyster Bay would be around $410,000.
However, there are also places that won't strain your finances as much. You might come across a house in Mbezi Beach for $290,000 or a house in Kariakoo that's priced at $240,000.
We give a more detailed breakdown in our full pack for buying property in Tanzania.
Common pitfalls
Here are the main pitfalls specific to buying a property in Dar es Salaam, Tanzania:
- Uncertain land tenure system with potential land disputes.
- Risk of acquiring properties on unauthorized land reserves or protected areas.
- Complex bureaucratic processes for property registration and ownership transfers.
- Lack of reliable property surveys, leading to boundary disputes.
- Hidden costs like customary land fees and unanticipated taxes.
- Exposure to currency fluctuations when dealing with foreign sellers.
- Limited availability of mortgage options for international buyers.
- Challenges in verifying property ownership due to informal land transactions.
We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.
Everything you need to know is included in our Tanzania Property Pack
Living in Dar es Salaam
Living in Dar es Salaam is a vibrant and exciting experience, with a diverse culture, friendly people, and plenty of opportunities for those looking to buy property.
Cost of living
The cost of living in Dar es Salaam is generally lower than in other major cities in the region. Basic necessities such as food, transportation, and utilities are relatively inexpensive compared to other cities in Africa.
Here are some examples to better understand the cost of living in Dar es Salaam, Tanzania:
- Rent for a one-bedroom apartment in the upscale Oyster Bay neighborhood: $800 per month.
- A meal at a local restaurant with "Mishkaki" (grilled meat skewers): $8.
- Monthly public transportation pass for DART buses: $20.
- Utilities (electricity, water) for a small apartment in Mikocheni: $50 per month.
- A bottle of Tanzanian Konyagi gin: $10.
- Entrance fee to the Makumbusho Village Museum: $5.
- Monthly membership at a popular gym chain like Smart Gyms: $35.
- A cup of "Kahawa Chungu" (strong local coffee) at a street café: $2.
Neighbourhoods
We want to show information in an easy-to-understand way. So we made a summary table that lists the different areas in Dar es Salaam. For yields, prices and rents, check our property pack.
| Neighborhood | Description | Strengths | Weaknesses |
|---|---|---|---|
Kisutu | Kisutu is a historic area with a mix of old and new buildings. It is a bustling commercial hub, known for its vibrant markets and street vendors. | Central location, diverse shopping options, vibrant atmosphere. | High traffic congestion, limited green spaces. |
Oyster Bay | Oyster Bay is an upscale residential neighborhood with beautiful sea views and a range of luxurious villas and apartments. It offers a serene and secure environment. | High-end real estate, scenic views, peaceful surroundings. | Limited affordable housing, restricted public transportation. |
Kariakoo | Kariakoo is a bustling market district with a lively atmosphere and diverse street food options. It is a major commercial and cultural hub, attracting locals and tourists alike. | Diverse shopping experiences, rich cultural heritage, bustling markets. | High noise levels, crowded streets, occasional pickpocketing. |
Mikocheni | Mikocheni is a residential area popular among expatriates, with a mix of houses and apartments. It offers proximity to international schools and various amenities. | International community, convenient location, good schools. | High living costs, limited public parks, occasional power outages. |
Kinondoni | Kinondoni is a diverse and populous district with a mix of residential and commercial areas. It offers a range of shopping centers, restaurants, and entertainment options. | Diverse communities, numerous amenities, vibrant nightlife. | Heavy traffic, urban sprawl, some areas lack proper infrastructure. |
Mbezi Beach | Mbezi Beach is a suburban neighborhood along the coast, known for its beautiful beaches and recreational activities. It is a popular residential area. | Beachfront properties, recreational opportunities, serene environment. | Limited public transportation, distance from the city center. |
Makumbusho | Makumbusho is a cultural district with several museums and cultural centers. It offers insights into Tanzania's rich heritage. | Cultural attractions, educational opportunities, peaceful surroundings. | Less commercial activity, limited nightlife, traffic during events. |
Upanga | Upanga is a well-established residential and commercial area. It has a mix of high-rise buildings and traditional houses. | Central location, various businesses, proximity to hospitals. | Some areas are overcrowded, limited green spaces. |
Mbagala | Mbagala is a large and densely populated suburb in Dar es Salaam. It has a mix of residential and industrial areas. | Affordable housing options, some industrial job opportunities. | Heavy traffic, limited public facilities, industrial pollution. |
Life in Dar es Salaam
Dar es Salaam is the largest city in Tanzania and the economic hub of the country. Its economy is supported by the port, tourism, manufacturing, and agricultural industries, which are all growing rapidly.
Referring to IMF data, the GDP of Dar es Salaam makes up about 13% of Tanzania's GDP. When you buy in a city with a strong economy, your investment is generally considered safer and less susceptible to market fluctuations.
What expats usually like the most in Dar es Salaam is the close proximity to beautiful beaches, as well as the vibrant nightlife and diverse cultural activities.
A good point for a property investor - Dar es Salaam has a mass rapid transit system, known as the Dar es Salaam Rapid Transit (DART).
Access to healthcare in Dar es Salaam is generally limited, with shortages of medical personnel and facilities.
Finally, it is worth noting that the Muhimbili University of Health and Allied Sciences ranks among the top 500 universities in the world.
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Renting out in Dar es Salaam
This section is for you if you're interested in purchasing property not for personal residence, but rather for the purpose of renting it out to generate rental income.
Long-term
Tenant Profiles in Dar es Salaam
If you decide to buy and rent out to long-term tenants, you should target young professionals, expats, and students in Dar es Salaam. For short-term rentals, you should focus on tourists and business travelers.
Here is a little summary table we've made for you.
| Property type and area | Profiles of potential tenants | What they are looking for | Expected monthly rent in $ |
|---|---|---|---|
Apartment in Masaki | Expats, professionals | Upscale living, ocean views | $800 - $1500 |
House in Mikocheni | Families, expats | Residential area, proximity to schools | $1000 - $2000 |
Studio in City Center | Young professionals, students | Central location, convenience | $600 - $1000 |
Apartment in Upanga | Professionals, families | Near city center, amenities | $700 - $1200 |
Apartment in Oysterbay | Expats, professionals | Exclusive neighborhood, modern amenities | $700 - $1500 |
Apartment in Kinondoni | Students, young professionals | Affordability, access to universities | $500 - $900 |
House in Tegeta | Families, suburban living | Quiet area, family-friendly | $800 - $1500 |
Rental yields
As of today, rental yields in Dar es Salaam are floating around 2 or 3%. It's low. Among other things, this low performance can be explained by the fact that there is an oversupply of rental properties in Dar es Salaam, which has driven down rental yields.
The best rental yields in Dar es Salaam come from properties located in up-and-coming, high-demand areas such as Oysterbay and Masaki, which have a large pool of potential tenants due to their proximity to shopping, entertainment, and business districts. Additionally, properties with multiple bedrooms and modern amenities tend to fetch higher rental prices, resulting in higher yields.
For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.
Short-term
You could also decide to rent short-term to business travelers, expats, and students studying abroad in Dar es Salaam. Additionally, tourists visiting the city on holiday could also be potential tenants for short-term rental.
If you decide to go with that option, look for properties in Upanga, Oysterbay, and Masaki. These areas have a high demand for short-term rental properties due to their proximity to the city center, shopping malls, and tourist attractions.
Currently, there are approximately 2,405 active Airbnb listings in Dar es Salaam, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $61.
You have the opportunity to generate a nice additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in Dar es Salaam can make around $500 per month. Also, the average occupancy rate is estimated at 40%.
Is it worth buying real estate in Dar es Salaam then?
Buying property in Dar es Salaam is a smart move for long-term residents, high-net-worth individuals, savvy investors, and expatriates looking for stability and potential returns. If you plan to call this vibrant city home for years to come, owning property can save you money compared to renting, build equity, and even offer a luxurious lifestyle in upscale neighborhoods.
The city's stable economic growth and a potentially rising housing market make it a promising investment opportunity. But remember, it's not for those looking for a quick flip or on a tight budget.
On the flip side, if you're a short-term visitor, budget-conscious, or risk-averse, buying property in Dar es Salaam may not be your best bet. High transaction costs and complex regulations can outweigh the benefits for those staying only briefly. Also, tourists are better off exploring short-term rental options.
Ultimately, your decision should align with your long-term goals and financial capabilities. In a city like Dar es Salaam, where the real estate market offers both promise and potential pitfalls, it's crucial to evaluate your situation carefully and consider professional advice if you're unsure.
Make sure you understand the real estate market in Dar es Salaam
Don't rush into buying the wrong property in Tanzania. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.