Buying property in Dar es Salaam: is it worth it?

Authored by the expert who managed and guided the team behind the Tanzania Property Pack

Yes, the analysis of Dar es Salaam's property market is included in our pack

Who is the author of this content?

THE AFRICANVESTOR

A team specialized in real estate investing in African countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Dar es Salaam. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At The AfricanVestor, we explore the Tanzanian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Dar es Salaam, Dodoma, and Arusha. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

Fact-checked and reviewed by our local expert

✓✓✓

Grace Makoye 🇹🇿

Manager of Operations, Zinza Real Estate

Grace Makoye is your go-to real estate expert in Dar es Salaam. As Manager of Operations at Zinza Real Estate, she helps clients secure prime commercial and residential properties with ease. Want the best deals? She's got you covered.

What are the current average purchase prices for apartments, houses, and land in Dar es Salaam?

As of September 2025, Dar es Salaam's property market shows clear price differentiation across property types and locations.

Apartment prices average USD 1,200 per square meter citywide, with significant variations by neighborhood. Prime central and coastal areas like Masaki and Oyster Bay command USD 1,400-1,800 per sqm, while suburban neighborhoods such as Mikocheni and Upanga range from USD 800-1,200 per sqm.

House prices start at USD 36,000-90,000 for entry-level new homes, depending on location and size. Prime properties in sought-after neighborhoods can exceed USD 200,000, particularly those with modern amenities or coastal proximity.

Land prices vary dramatically based on location and development potential. Beachfront and central parcels command premium prices, while outer suburban plots offer more affordable entry points for development projects. Emerging areas like Bunju and Kinyerezi offer development land from USD 20,000-50,000 per plot.

It's something we develop in our Tanzania property pack.

How do rental yields compare across different property types and neighborhoods?

Dar es Salaam's rental market delivers competitive yields that outperform many global markets.

Property Type	Location	Annual Rental Yield	Market Stability
Apartments	Prime Areas (Masaki, Oyster Bay)	6-9%	High
Apartments	Suburban Areas	8-12%	Medium-High
Short-term Rentals	Coastal/Tourist Areas	Up to 12%	Medium
Houses	Family Neighborhoods	7-10%	High
Commercial Residential	Business Districts	8-11%	High

What's the typical short-term appreciation trend over the past three years, and how stable has it been?

Dar es Salaam's property market has demonstrated consistent upward momentum over the past three years.

Annual appreciation has averaged 5-7% across all property types, with prime neighborhoods showing particularly strong performance. Coastal areas like Masaki and Oyster Bay have experienced the highest appreciation rates, often exceeding the city average.

Market stability has remained robust throughout this period, supported by steady population growth, infrastructure investment, and increasing foreign and corporate demand. Unlike many emerging markets that experience volatile price swings, Dar es Salaam has maintained steady growth trajectories.

Fast-developing suburbs including Mbezi Beach, Kigamboni, and Bunju have shown exceptional appreciation potential, with some areas experiencing double-digit growth as infrastructure development catches up with demand.

What are the medium-term growth projections for the next five to seven years?

Medium-term projections for Dar es Salaam's property market remain optimistic through 2032.

Industry analysts project continued annual price growth of 4-7%, supported by major public infrastructure projects, urban expansion initiatives, and pro-investor government policies. The city's role as East Africa's commercial gateway continues to strengthen, driving sustained demand.

Key growth drivers include the ongoing Standard Gauge Railway project, port expansion, and new road networks connecting suburban areas to the city center. These infrastructure investments are expected to unlock value in previously underdeveloped areas.

Population growth projections indicate Dar es Salaam will continue expanding rapidly, with urban migration from rural areas maintaining pressure on housing demand. The emerging middle class is expected to drive particularly strong demand for mid-range housing options.

Foreign direct investment in real estate is projected to increase as regional stability improves and investment frameworks become more transparent and accessible to international buyers.

What's the long-term outlook if you hold property for more than ten years?

Long-term property investment in Dar es Salaam presents strong fundamentals for sustained growth beyond 2035.

Holding property for 10+ years positions investors to benefit from the city's transformation into a major regional commercial and financial hub. As Tanzania's economy diversifies beyond agriculture and mining, Dar es Salaam is expected to capture increasing shares of regional trade and business activity.

Demographic trends strongly favor long-term property appreciation. The city's population is projected to double by 2035, creating sustained housing demand across all market segments. Young demographics mean a growing workforce and expanding middle class will drive homeownership aspirations.

Infrastructure development programs extending through the 2030s will likely unlock significant value in currently peripheral areas. Well-located properties purchased today should benefit from improved connectivity and urban development.

Climate change considerations may actually benefit Dar es Salaam relative to other coastal cities, as planned urban resilience investments could enhance the city's long-term attractiveness compared to more vulnerable markets.

Which neighborhoods show the highest demand for rentals, and which ones are more attractive for resale?

Dar es Salaam's rental and resale markets show distinct neighborhood preferences based on tenant demographics and buyer profiles.

1. **Highest Rental Demand Areas:** - Masaki - Popular with expats and business executives - Oyster Bay - High-end residential with international appeal - Upanga - Mixed-income area with strong local demand - Mikocheni - Growing professional class neighborhood - Mbezi Beach - Emerging coastal residential area2. **Prime Resale Markets:** - Masaki - Strongest capital appreciation and buyer interest - Oyster Bay - Prestigious address with limited supply - Kigamboni - Development potential attracting investors - Mbezi Beach - Infrastructure improvements driving value3. **Emerging Opportunity Areas:** - Bunju - New infrastructure creating investment interest - Tabata - Affordable area with development potential - Tegeta - Growing suburban market with good connectivity

It's something we develop in our Tanzania property pack.

How do returns differ between central areas, coastal areas, and developing suburbs?

Investment returns vary significantly across Dar es Salaam's different geographic zones, each offering distinct risk-return profiles.

Central areas deliver the strongest capital appreciation with moderate-to-high rental yields and minimal vacancy risk. These established neighborhoods benefit from existing infrastructure, proximity to business districts, and consistent demand from both local and international tenants.

Coastal areas attract premium pricing due to lifestyle appeal and tourism potential. Short-term rental yields in coastal neighborhoods can reach 12% annually, particularly during peak tourist seasons. These areas also maintain strong resale value due to limited beachfront supply.

Developing suburbs offer the highest potential returns but with increased risk and volatility. Yields can match or exceed prime areas while offering significantly lower entry costs. However, infrastructure dependencies and market timing become critical factors for success.

Suburban areas like Bunju and Kigamboni represent the sweet spot for buy-and-hold investors, combining reasonable entry costs with strong development potential as city expansion continues outward.

What's the minimum entry budget for each property type in the most popular areas?

Entry budgets in Dar es Salaam vary significantly based on property type and location preferences.

For apartments, entry-level 1-bedroom units in desirable neighborhoods start from USD 70,000-100,000. These typically offer 45-65 square meters in areas like Upanga or Mikocheni. Luxury options in prime locations like Masaki or Oyster Bay exceed USD 200,000 for similar-sized units with premium amenities.

House purchases begin at USD 36,000 in outer districts for basic new construction. Mid-range family homes in good neighborhoods typically cost USD 100,000-150,000, while upscale properties with modern amenities start around USD 200,000. Premium beachfront or expat-targeted homes can exceed USD 250,000.

Land investment offers the lowest entry point, with development plots available from USD 20,000-50,000 in emerging suburbs like Bunju or Kinyerezi. Central or coastal land parcels command significantly higher prices but offer greater development potential.

Additional costs including legal fees, stamp duty, and registration typically add 5-10% to purchase prices, so budget accordingly for total acquisition costs.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Tanzania versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

How does the cost of maintenance, taxes, and fees affect net returns for buyers?

Understanding ongoing costs is crucial for accurate return calculations in Dar es Salaam's property market.

Maintenance costs for modern apartments and houses typically range from USD 800-2,000 annually, varying significantly based on amenities, location, and security requirements. Properties in gated communities or high-end complexes generally incur higher maintenance fees but may command premium rents.

Property taxes remain relatively modest compared to international standards. Annual land rents for developed plots are generally affordable but should be factored into long-term return calculations. Local service charges for utilities and municipal services add approximately USD 200-600 annually depending on property size and location.

Transaction costs significantly impact net returns, particularly for short-term investments. Total fees including legal costs, stamp duty, registration, and agent commissions typically represent 5-10% of property value. These upfront costs mean investors should plan for longer holding periods to achieve optimal returns.

Property management services, essential for absentee landlords, typically cost 8-12% of rental income but can improve occupancy rates and rental yields through professional management and tenant screening.

If you buy today, what's the best positioning for living, renting out, or reselling later?

Strategic positioning depends heavily on your primary investment objective and timeline.

For owner-occupiers prioritizing lifestyle, coastal and central neighborhoods offer the best amenities and convenience. Masaki, Mikocheni, Upanga, and Oyster Bay provide excellent living conditions with good infrastructure, security, and proximity to international schools, healthcare, and business districts.

Rental income optimization favors different strategies by market segment. Short-term rentals perform best in expat and tourist areas like Masaki, Oyster Bay, and Kigamboni beach, where international appeal and coastal proximity command premium rates. Long-term rental investments should focus on emerging districts with strong development potential like Mbezi Beach and Bunju.

Resale positioning requires identifying areas with above-average appreciation potential. Properties near major infrastructure projects, in rapidly growing suburbs, or in supply-constrained prime locations offer the strongest resale prospects. Consider neighborhoods like Kigamboni, Mbezi Beach, and Bunju where infrastructure development is creating value acceleration.

Mixed-use strategies combining personal use with rental income work well in areas like Mikocheni or Upanga, where strong local demand provides rental security while maintaining good lifestyle amenities for periodic personal use.

It's something we develop in our Tanzania property pack.

What risks or challenges—legal, regulatory, or market—should you factor in before buying?

Foreign property investment in Dar es Salaam involves several specific challenges that require careful navigation.

1. **Legal Restrictions:** - Foreigners can only purchase leasehold properties (maximum 99 years) - Complex title verification process requiring thorough due diligence - Land ownership disputes can be lengthy and expensive to resolve2. **Regulatory Challenges:** - Evolving property registration systems may cause delays - Foreign exchange controls affect international money transfers - Tax obligations can be complex for non-resident owners3. **Market Risks:** - Oversupply in luxury/high-end segments in certain areas - Economic policy changes could impact property values - Currency fluctuation affects USD-denominated returns4. **Operational Challenges:** - Property management requires reliable local partners - Construction quality varies significantly between developers - Infrastructure development timelines may affect property accessibility5. **Financial Constraints:** - Limited mortgage financing options for foreigners - High transaction costs reduce short-term investment viability - Liquidity can be limited for quick property sales

Compared to other major African cities, how competitive is Dar es Salaam for property investment right now?

Dar es Salaam ranks among Africa's most dynamic and competitive property investment destinations in 2025.

Compared to established markets like Nairobi, Lagos, or Johannesburg, Dar es Salaam offers superior rental yields with similar or better capital appreciation potential. The city's 6-9% annual rental yields significantly outperform many international markets while maintaining lower entry costs than more mature African property markets.

Infrastructure development pace exceeds most comparable African cities, with major transportation, port, and utility projects creating substantial value drivers for property investors. The Standard Gauge Railway and port expansion projects position Dar es Salaam as East Africa's logistics hub, supporting long-term property demand.

Political stability and pro-investment policies create a more favorable environment than many regional alternatives. Tanzania's improving ease-of-business rankings and foreign investment framework enhancements make property acquisition more straightforward than in markets with restrictive foreign ownership rules.

Economic fundamentals including GDP growth, urbanization rates, and demographic trends match or exceed regional benchmarks. The expanding middle class and young population structure support sustained housing demand across all market segments.

Currency stability and banking system improvements provide greater confidence for international investors compared to markets experiencing significant exchange rate volatility or financial sector challenges.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. The African Vestor - Dar es Salaam Price Forecasts
2. The African Vestor - Tanzania Price Forecasts
3. The African Vestor - Dar es Salaam Property
4. MR Land Properties - Tanzania Real Estate Trends 2025
5. AHK Kenya - Tanzania Real Estate Growth Through 2030
6. AfricaCaya - Top Growing Neighborhoods Dar es Salaam
7. The African Vestor - House Prices Tanzania
8. Coldwell Banker Tanzania - Dar es Salaam Rental Yields 2025