Is Dodoma property market growing with government relocation?

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

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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 Tanzania. 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 Dodoma, Dar es Salaam, 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

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Grace Makoye 🇹🇿

Manager of Operations, Zinza Real Estate

Grace Makoye is a real estate expert and Manager of Operations at Zinza Real Estate. She helps buyers and investors navigate Tanzania's property market, from commercial deals to high-yield investments. With her expertise, you'll find the right property hassle-free.

What is the current population of Dodoma and how has it changed in recent years?

As of 2025, Dodoma's city population stands at 336,561 people, representing dramatic growth from just 83,205 residents in 1988.

The city has experienced remarkable population expansion, nearly doubling since 2012 when the government relocation plan gained momentum. This growth trajectory places Dodoma among Tanzania's fastest-growing urban centers, driven primarily by the influx of government workers and their families.

The broader Dodoma Region encompasses over 2.6 million people as of recent projections, indicating the city's growing influence as an administrative and economic hub. Population experts predict this upward trend will continue as more government institutions complete their relocation and supporting industries establish operations in the capital.

Current population density remains manageable compared to Dar es Salaam, creating opportunities for planned urban development and infrastructure expansion to accommodate future growth.

How many government employees have moved to Dodoma since the relocation started?

Since the 2016 government relocation plan implementation, at least 25,039 government employees have officially relocated to Dodoma along with 65 government institutions.

The relocation process has been systematic, with different ministries and departments moving in phases to ensure continuity of government services. The timeline targets full government relocation completion by 2025, meaning additional thousands of civil servants are expected to make the move in the coming months.

This massive employee migration has created unprecedented demand for housing, both rental and purchase properties, as relocating families seek suitable accommodation near their new workplaces. Many employees initially stayed in temporary housing before securing permanent residences, contributing to the sustained housing demand.

The relocation includes not just individual employees but entire families, multiplying the actual population impact and creating demand for schools, healthcare facilities, and commercial services.

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

What is the current housing demand in Dodoma since government relocation began?

Housing demand in Dodoma has reached exceptional levels, with near-full occupancy rates for both residential and commercial properties becoming the norm.

Rental properties, particularly those located near government ministries and institutions, experience extremely high demand with waiting lists common for quality units. The city now boasts the highest rental rates in Tanzania, reflecting the intense competition for available housing stock.

Commercial office space demand has similarly surged, with businesses seeking locations to serve the growing government workforce and expanding population. Mixed-use developments combining residential and commercial spaces are particularly sought after.

Housing shortages persist across all price segments, but affordable housing faces the most severe constraints. Quality rental stock remains insufficient to meet demand, creating opportunities for property developers and investors willing to enter this market.

The sustained demand spans both purchase and rental markets, with many relocated government employees eventually seeking to buy rather than rent long-term.

How have property prices in Dodoma changed over the past five years?

Property prices in Dodoma have risen steadily over the last five years, with residential properties currently averaging $800 to $1,200 per square meter.

The price increases align with Tanzania's national urban property growth rate of 6-8% annually, though Dodoma has experienced more consistent growth due to sustained government-driven demand. Land values have appreciated particularly strongly in areas designated for government housing estates and commercial development.

Commercial property prices have seen even steeper increases, driven by businesses competing for prime locations near government offices and main transportation routes. Retail and office space commands premium pricing due to limited supply and high demand.

Real estate experts anticipate further price increases as Dodoma's status as the political capital solidifies and infrastructure projects reach completion. The price growth trajectory appears sustainable given the continued government investment and population influx.

Property appreciation rates vary by location within Dodoma, with areas closer to government complexes and major infrastructure projects experiencing the highest value increases.

What new infrastructure developments support the government relocation?

Major infrastructure projects are transforming Dodoma's landscape to support the government relocation and accommodate rapid urban growth.

The Dodoma Outer Ring Road, spanning 112 kilometers, is nearing completion and will significantly improve traffic flow and connectivity within the city. This project alone represents a multi-billion shilling investment in urban mobility infrastructure.

Msalato International Airport is under development to serve as a modern gateway to the capital, replacing the current smaller facility and enabling increased business and government travel. The airport project includes modern terminals and expanded runway capacity.

Healthcare infrastructure has expanded dramatically, with health facilities increasing from 429 to 467 within just three years. Educational infrastructure has similarly grown with new schools and expansion of existing institutions to serve the growing population.

Water supply systems have been enhanced to meet increased demand, while new government housing estates provide accommodation for relocated civil servants. Enhanced telecommunications and digital infrastructure support modern government operations and attract businesses to the city.

What is the current property supply situation in Dodoma?

Dodoma's property market currently offers a diverse mix of residential, commercial, and land plots for both sale and rental, though supply struggles to meet surging demand.

Residential supply includes everything from budget apartments to luxury estates, with particular development activity in fast-growing districts like Nkuhungu. However, the supply of quality rental properties remains insufficient for the influx of government workers and their families.

Commercial property supply focuses on office buildings, retail spaces, and mixed-use developments designed to serve the expanding government and business community. New commercial developments are under construction, but completed spaces are quickly occupied.

Land plot availability varies by location, with affordable plots in expansion zones attracting significant investor interest for future development. Prime locations near government complexes command premium prices due to scarcity.

Development activity continues at a rapid pace, but construction timelines mean supply will likely lag behind demand for the foreseeable future, maintaining upward pressure on both prices and rental rates.

Which property types are experiencing the strongest growth in Dodoma?

Residential properties are experiencing the strongest growth in Dodoma's property market, particularly estate housing and rental apartments designed for government workers and their families.

Estate housing developments that offer modern amenities, security, and proximity to government offices command premium prices and experience rapid sales. Multi-bedroom units suitable for relocated families are especially popular among government employees making permanent moves.

Commercial mixed-use developments combining offices, retail, and residential spaces are seeing exceptional growth as developers respond to diverse market needs. These properties offer flexibility and higher rental yields for investors.

Land plots in designated expansion zones attract strong investor interest, particularly affordable parcels suitable for future development. Investors purchase these plots anticipating continued urban growth and infrastructure expansion.

Retail and office properties strategically located near government complexes and main transportation routes experience consistent demand and strong appreciation potential.

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

How does the government plan to develop Dodoma's economy beyond office relocation?

The Tanzanian government's economic development strategy for Dodoma extends far beyond office relocation through the Five-Year Development Plan III (FYDP III), focusing on increased production and competitiveness.

Logistics sector expansion is a key priority, with Dodoma positioned as a central hub connecting Tanzania's regions through improved road, rail, and air transport infrastructure. This strategic location advantage supports both government operations and private sector growth.

Tourism development plans capitalize on Dodoma's central location and cultural significance, with investments in hospitality infrastructure and promotion of historical and cultural attractions. Educational sector expansion includes universities and technical institutions to serve the growing population and create a skilled workforce.

Information and Communication Technology (ICT) sector development aims to establish Dodoma as a digital hub supporting e-government initiatives and attracting technology companies. Manufacturing and agro-processing industries are being encouraged through incentives and infrastructure support.

Housing and mortgage facility improvements, combined with affordable housing programs and regulatory support, create a foundation for sustained economic growth beyond government operations.

What are the current rental yields in Dodoma for different property types?

Prime commercial properties in Dodoma currently generate rental yields averaging 6-10%, making them among the most attractive in Tanzania for property investors.

Commercial office spaces near government complexes command the highest yields due to sustained demand from businesses serving the relocated government workforce. Retail properties in high-traffic areas also generate strong rental returns, particularly those serving daily needs of the growing population.

Residential rental yields vary significantly based on property type and location, with quality apartments near government offices generating yields comparable to prime areas in Dar es Salaam and Arusha. Budget residential properties may offer higher yields but require careful location selection.

Mixed-use developments combining residential and commercial spaces often achieve balanced yields while offering diversification benefits to investors. These properties can adapt to changing market conditions by adjusting the residential-commercial mix.

Rental yield sustainability appears strong given the continued government presence and infrastructure investments, though investors should monitor market saturation as new supply comes online.

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 Dodoma's property market compare to other Tanzanian cities?

Dodoma has emerged as Tanzania's fastest-growing property market in terms of occupancy rates and rental pricing, outpacing most cities except Dar es Salaam in absolute market size.

City	Market Characteristics	Growth Drivers
Dodoma	Highest occupancy, fastest price growth	Government relocation, infrastructure
Dar es Salaam	Largest market, established commercial center	Port operations, business hub
Arusha	Tourism-driven, seasonal variations	Safari tourism, conferences
Mwanza	Mining sector focus, steady growth	Gold mining, regional commerce
Zanzibar	Tourism and hospitality dominated	Tourism, spice trade

Administrative migration distinguishes Dodoma's growth from other cities, creating more predictable and sustained demand compared to tourism or commodity-dependent markets. Infrastructure expansion in Dodoma receives dedicated government funding unavailable to other cities.

Urbanization in Dodoma follows planned development patterns rather than the organic growth seen in Dar es Salaam, potentially avoiding some infrastructure strain and urban planning challenges. Investment potential in Dodoma benefits from government policy support and strategic national importance.

Rental rates in Dodoma now exceed most regional cities due to the unique demand-supply imbalance created by rapid population growth and limited existing housing stock.

What are the main challenges facing property investors in Dodoma currently?

Property investors in Dodoma face significant challenges related to housing shortages and supply constraints across both affordable and premium market segments.

1. Affordable housing shortage creates market gaps but requires substantial capital investment to develop at scale
2. Office supply limitations constrain commercial investment opportunities despite strong demand
3. Unregulated pricing in some market segments creates uncertainty about sustainable rent levels
4. Post-relocation vacancy risks concern investors about long-term demand sustainability once government moves are complete
5. Land acquisition processes can be complex and time-consuming, slowing development projects

Market restructuring risks accompany the rapid transformation from administrative center to major city, with potential for sudden policy changes affecting property markets. Regulatory changes in land ownership, foreign investment rules, or taxation could impact investor returns.

Infrastructure development, while positive overall, can create temporary access and construction disruption affecting property values and rental income. Construction quality concerns arise as rapid development may compromise building standards.

Financing challenges for both developers and buyers may limit market expansion, particularly for affordable housing projects requiring government support or international funding.

What are the predicted growth trends for Dodoma's property market in the next 5-10 years?

Property prices in Dodoma are predicted to continue rising steadily over the next 5-10 years as the city's population is projected to double by 2040, driven by continued government investment and economic diversification.

Infrastructure upgrades including the completion of major transportation projects, airport development, and utility expansion will attract both domestic and foreign investment in residential and commercial properties. These infrastructure improvements create long-term value appreciation potential across all property types.

Commercial and industrial diversification beyond government operations will reduce market dependence on administrative functions, creating more sustainable growth patterns. Tourism, education, logistics, and technology sectors are expected to contribute increasing demand for various property types.

Foreign and domestic investment demand for both residential and commercial spaces is expected to remain robust, supported by ongoing government policy favorable to property development and investment. International interest in Tanzania's capital city may increase as political stability and infrastructure improve.

Population growth projections suggest sustained housing demand through 2035, while commercial property demand will benefit from business expansion serving the growing urban population and government operations.

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.

Sources

1. World Population Review - Dodoma
2. The Citizen - Dodoma Property Occupancy
3. The African Vestor - Tanzania Real Estate Forecasts
4. World Bank - Dodoma Urban Mobility
5. Daily News - Dodoma Roads Investment
6. IPP Media - Government Relocation Timeline
7. Bank of Tanzania - Economic Development
8. Property.tz - Investment Opportunities
9. The Conversation - Dodoma Readiness
10. CBC Worldwide - Commercial Real Estate