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Zanzibar's property market is experiencing remarkable growth, with prices rising 8-10% annually.
Current apartment prices range from $1,100 per m² in suburban areas to $3,700 per m² in Zanzibar City centre, while luxury beachfront villas command $2,400-2,800+ per m². The island has seen an 86.65% price increase over the past five years, significantly outperforming other East African markets.
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Zanzibar property prices have surged 86.65% in five years, with beachfront villas starting at $325,000 and city apartments averaging $1,100-3,700 per m².
Mortgage rates average 15%, transaction costs add 7-12% to purchase price, and annual property growth continues at 8-10% in prime locations.
| Property Type | Price per m² (USD) | Typical Total Cost |
|---|---|---|
| City Centre Apartments | $3,700 | $150,000-300,000 |
| Suburban Properties | $1,100 | $80,000-150,000 |
| Stone Town Heritage | $1,000-1,500 | $120,000-250,000 |
| Luxury Beachfront Villas | $2,400-2,800+ | $325,000-2,000,000+ |
| Coastal Plots | $23-450 | $50,000-500,000 |
Fact-checked and reviewed by our local expert
Grace Makoye 🇹🇿
Manager of Operations, Zinza Real Estate
How much does property cost in Zanzibar right now?
Property prices in Zanzibar vary significantly depending on location and property type, with current market rates reflecting strong growth.
As of September 2025, apartments in Zanzibar City centre cost approximately $3,700 per square meter, while suburban and developing areas offer more affordable options at around $1,100 per square meter. Stone Town heritage apartments range from $1,000 to $1,500 per square meter.
Luxury beachfront villas command premium prices of $2,400 to $2,800+ per square meter, with complete villa prices starting around $325,000 and extending beyond $2 million for ultra-luxury properties. The average three-bedroom house in an established area costs approximately $150,000, while smaller two-bedroom properties start from $80,000.
Coastal plots present varying price points, ranging from $23 to $35 per square meter in areas like Kiwengwa, Matemwe, and Pemba. Premium beachfront plots in exclusive Michamvi can reach $450 per square meter.
These prices reflect Zanzibar's position as one of East Africa's fastest-growing property markets, with annual appreciation rates of 8-10%.
What are the current prices per square meter for different property types in Zanzibar?
Zanzibar's property market shows distinct pricing tiers based on location, property type, and amenities.
| Property Type | Location | Price per m² (USD) |
|---|---|---|
| City Centre Apartments | Zanzibar City | $3,700 |
| Suburban Apartments | Developing Areas | $1,100 |
| Heritage Apartments | Stone Town | $1,000-1,500 |
| Luxury Beachfront Villas | Prime Coastal Areas | $2,400-2,800+ |
| Standard Coastal Plots | Kiwengwa, Matemwe, Pemba | $23-35 |
| Premium Beachfront Plots | Michamvi | Up to $450 |
Which areas offer the most affordable properties and which are most expensive?
Zanzibar's property market shows clear geographical pricing patterns, with significant variation between budget-friendly and luxury areas.
The most affordable properties are found in Makunduchi, offering plots with 4-6% annual price growth and community-focused living. The suburbs of Zanzibar City also provide cost-effective options for buyers seeking proximity to urban amenities without premium pricing.
The most expensive areas center around Nungwi, which serves as the epicenter of luxury development on the island. Michamvi, Jambiani, and Stone Town heritage zones also command premium prices due to their unique characteristics and investment appeal.
Emerging hotspots include Michamvi with fast appreciation rates, Jambiani popular for vacation rentals, and areas like Kendwa and Matemwe that are experiencing increased development interest. These areas offer a middle ground between affordability and growth potential.
It's something we develop in our Tanzania property pack.
What is the average total price including all fees and taxes?
Property buyers in Zanzibar must budget for significant additional costs beyond the base purchase price.
For a typical $150,000 three-bedroom house, buyers face stamp duty ranging from 1-5% of property value, registration fees of 1-2%, legal fees of 1-2%, and survey/beacon fees between $2,000-5,000. Additional ZIPA and administrative fees also apply.
The total transaction costs typically range from $7,000 to $15,500 above the purchase price, representing an additional 7-12% of the property value. This means a $150,000 property actually costs between $157,000-165,500 when all fees are included.
Breakdown for a $150,000 property includes stamp and transfer fees of $1,500-7,500, registration and legal costs of $1,500-3,000, and survey expenses of $2,000-5,000. These costs are mandatory and should be factored into any purchase decision.
What are typical property taxes and recurring costs for owners?
Property ownership in Zanzibar involves several recurring costs that vary by property type and use.
All leasehold properties require annual ground rent payments, which constitute the primary ongoing tax obligation. Properties used for rental purposes face an infrastructure tax of $5 per guest per night, significantly impacting short-term rental profitability.
Tourism Development Levy and village fees apply to rental units and hotels, with costs varying by location and property classification. These fees are collected per night or annually depending on local regulations.
Additional recurring costs include maintenance, insurance, and possible local council taxes that vary by property size and location. Property owners should budget for these ongoing expenses when calculating investment returns.
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What mortgage rates and financing options are available for buyers?
Zanzibar's mortgage market offers several financing options, though rates remain relatively high by international standards.
Current mortgage interest rates range from 13-19%, with the average bank rate around 15%. This represents a significant improvement from the 22-24% rates seen in 2010, reflecting Tanzania's improving financial sector.
Most banks offer both purchase loans and equity-release loans for existing property owners. Construction loans are less common and typically more expensive than standard purchase financing.
Consumer loans have become increasingly competitive and are sometimes used for property purchases when they offer better terms than traditional mortgages. Competition between lenders has increased access to financing options for qualified buyers.
How have property prices changed over recent years?
Zanzibar has experienced exceptional property price growth, significantly outperforming regional markets.
Over the past five years from 2020 to 2025, Zanzibar property prices have risen by an impressive 86.65%. This dramatic increase reflects growing international interest, tourism development, and infrastructure improvements across the island.
In the past year alone, beachfront properties have surged 15%, while the overall market maintains an 8-10% annual appreciation rate. Mid-range urban properties show more moderate but steady growth of 3-7% annually.
This growth trajectory positions Zanzibar as one of East Africa's strongest performing property markets, attracting both local and international investors seeking capital appreciation opportunities.
What are the projected property price trends for the future?
Market analysts project continued strong growth for Zanzibar's property sector across multiple time horizons.
For the next year, prime and luxury properties are expected to continue their 8-10% annual growth trajectory, driven by sustained tourism demand and limited luxury inventory. This short-term outlook reflects current market momentum and ongoing infrastructure developments.
The five-year forecast suggests more moderate but sustained growth of 4-8% annually, supported by tourism expansion, infrastructure development, and continued foreign investment interest. This represents healthy, sustainable growth that supports long-term investment strategies.
Ten-year projections indicate Zanzibar will likely continue outperforming regional African averages, with annual growth rates expected to remain above continental benchmarks if current infrastructure development and tourism demand trends continue.
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 do Zanzibar property prices compare to other African cities?
Zanzibar's property market shows competitive pricing relative to other major African urban centers.
| City | Price per m² (USD) | 5-Year Growth (%) |
|---|---|---|
| Zanzibar City | $1,100-3,700 | 86.65% |
| Dar es Salaam | $1,200-3,820 | 86.65% |
| Nairobi | $1,500-4,000 | 40-60% |
| Kigali | $1,000-2,500 | 60-80% |
| Kampala | $500-1,200 | 30-50% |
What are the best areas to buy if you want to live in Zanzibar?
The optimal residential areas in Zanzibar depend on lifestyle preferences, budget, and proximity requirements.
Zanzibar City centre offers the best infrastructure, services, and urban amenities for those seeking convenience and cultural immersion. The city provides reliable utilities, healthcare facilities, educational institutions, and employment opportunities.
Suburban areas around Zanzibar City provide a balance of affordability and accessibility, offering more space and lower prices while maintaining reasonable access to urban services and amenities.
Makunduchi appeals to buyers seeking quiet, community-focused living away from tourist areas. This area offers authentic local culture, lower property prices, and a more traditional Zanzibari lifestyle experience.
Stone Town attracts cultural enthusiasts and history lovers who value UNESCO World Heritage status, architectural significance, and central location. However, properties here require consideration of heritage restrictions and maintenance requirements.
Which areas are best for short-term versus long-term rentals?
Zanzibar's rental market shows distinct geographical preferences based on rental duration and target clientele.
For short-term vacation rentals, Nungwi leads as the premier destination, offering luxury beach access, resort amenities, and high tourist traffic. Jambiani attracts kitesurfing enthusiasts and adventure tourists, while Paje draws visitors seeking nightlife and beach activities.
Matemwe provides opportunities for boutique resort-style rentals, appealing to upmarket tourists seeking quieter, more exclusive experiences away from the main tourist crowds.
Long-term rental opportunities concentrate in Zanzibar City and suburban areas, where local residents, expatriates, and long-term visitors seek stable housing with access to services, employment, and educational facilities.
It's something we develop in our Tanzania property pack.
Which areas offer the best investment potential for resale?
Investment-focused buyers should consider areas showing strong appreciation trends and development momentum.
Nungwi remains the top choice for luxury property investment, with continuous high-end development, strong tourism demand, and proven appreciation rates. The area's established infrastructure supports sustainable long-term growth.
Michamvi represents an emerging hotspot with fast appreciation rates, offering early-stage investment opportunities before full development maturity. Kendwa shows similar potential with ongoing luxury development projects.
Stone Town provides heritage-focused investment opportunities, combining cultural significance with rising rental yields. However, investors must navigate heritage preservation restrictions and higher maintenance costs.
Areas showing consistent development interest and infrastructure improvements offer the most reliable long-term appreciation potential for resale-focused investment strategies.
It's something we develop in our Tanzania property pack.
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.
Zanzibar's property market in September 2025 offers compelling opportunities for both investors and residents, with prices ranging from $1,100 per m² in suburban areas to $3,700 per m² in prime city locations.
With 86.65% growth over five years and continued 8-10% annual appreciation, the market demonstrates strong fundamentals supported by tourism growth, infrastructure development, and increasing international interest in East African property investments.
Sources
- The Africanvestor - Zanzibar Price Forecasts
- The Africanvestor - House Price Tanzania
- The Property Hub TZ - Understanding Property Prices
- Vela Zanzibar - Property Investment Statistics
- The Africanvestor - Foreigners Buy Land Zanzibar
- The Africanvestor - Tanzania Price Forecasts
- The Africanvestor - Zanzibar Real Estate Market
- Tanzania Invest - Mortgage Market Q1 2025
- The Property Hub TZ - Best Places to Buy Land
- Sandbank Villas - Owning Property as Foreigner