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What will happen in Tanzania’s real estate market? Will prices go up or down? Is Dar es Salaam still a hotspot for foreign investors? How is Tanzania’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with notaries, real estate agents, and clients who buy properties in Tanzania, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) Tanzania’s home prices will rise gradually due to better infrastructure
Tanzania's residential property market is on the rise thanks to major infrastructure investments.
One of the key drivers is the Tanzania Water Investment Program (TanWIP), which has allocated a whopping TZS35.1 trillion ($13.5 billion) to enhance clean water infrastructure. This initiative is not just about pipes and pumps; it's about ensuring that by 2030, every home has reliable access to water, making residential areas more appealing.
In Dar es Salaam, the Dar es Salaam Metropolitan Development Project (DMDP) is reshaping the city. With a TZS1 trillion ($385.5 billion) investment, the project is building flyovers, a bus rapid transit system, and better roads. These changes are making the city more accessible, which is a big plus for anyone looking to buy a home there.
Transportation is also getting a boost with the expansion of the Standard Gauge Railway (SGR). This railway connects major regions like Dar es Salaam, Morogoro, and Dodoma, making travel smoother and faster. In just three months, it transported 645,621 passengers and brought in TZS16.95 billion in revenue, showing that people are keen on these connected areas.
These infrastructure projects are not just about convenience; they are setting the stage for a gradual increase in property prices. As areas become more developed and accessible, the demand for homes is likely to rise, pushing prices up.
For potential buyers, this means that investing in Tanzanian real estate now could be a smart move. With ongoing improvements and a focus on making cities more livable, the future of the residential market looks promising.
Sources: Zurich Insurance EA, Business Wire, Railway Supply
2) Property prices in rural Tanzania will rise more slowly than in urban areas
In Tanzania, urban areas are growing faster economically than rural ones.
With cities like Dar es Salaam on track to become a megacity by 2035, the urban population is expected to hit 45 million by 2030. This surge means more people will need homes, naturally pushing property prices up in these bustling areas.
Urban centers are buzzing with job opportunities, especially in booming sectors like mining and tourism. This influx of workers drives up the demand for housing, making city properties more valuable.
In contrast, rural areas are not experiencing the same economic boom. While they offer a quieter lifestyle, the slower pace of development means property prices rise more gradually compared to the city.
For those considering buying property, it's worth noting that urban areas are the hotspots for investment due to their rapid growth and demand.
Rural properties, however, might appeal to those seeking a more relaxed environment, with the added benefit of slower price increases, making them potentially more affordable in the long run.
Sources: Tanzania Price Forecasts, Tanzania Urbanization Laboratory, New Climate Economy
We made this infographic to show you how property prices in Tanzania compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
3) Property prices in Tanzania will adjust moderately in areas where there is too much supply
The real estate market in Tanzania is seeing some shifts, especially in areas with too many properties.
In urban spots, vacancy rates are high, and this has led to residential lease rates dropping by nearly 50% over the past two years. The pandemic played a big role in this, weakening demand and leaving many rental properties empty. In places like Arusha, there are unsold housing units in new developments, with many buildings still waiting for occupants.
Rental yields are also on the decline in these oversupplied areas, pushing tenants to move into homes that were once out of their budget. A good example is the PSSSF Towers, where 84 units were quickly leased as tenants seized the opportunity to upgrade.
Real estate agents are noticing that properties are taking longer to sell, which points to a supply-demand mismatch. This is typical in markets with too many properties, causing prices to stagnate or even drop in some neighborhoods. While there’s talk of property prices rising in 2025, the increase is expected to be modest, around 3% to 7% of their 2024 values.
In oversupplied areas, this means potential price corrections. The market is adjusting, and buyers might find opportunities in these regions. The situation is a bit of a mixed bag, with some areas struggling while others might see growth.
Sources: Knight Frank, Zurich Insurance EA
4) Rents in tourist areas will rise as demand for short-term rentals increases
The demand for short-term rental properties in tourist areas is on the rise, driving up rents in those regions.
In 2023, Tanzania experienced a tourism boom, with visitor numbers jumping by 24.3% compared to the previous year. This influx of tourists is fueling the need for short-term rentals, as more travelers seek convenient places to stay. In hotspots like Dar es Salaam and Zanzibar, short-term rentals are seeing high occupancy rates, indicating their popularity among visitors.
In Dar es Salaam, a typical short-term rental is booked for 179 nights a year, with a median occupancy rate of 49%. Meanwhile, in Zanzibar, properties are occupied for 150 nights annually, with a 41% occupancy rate. These figures highlight the strong demand for short-term rentals, which naturally pushes rents higher.
The rise of platforms like Airbnb is also playing a role in this trend. By late 2024, Dar es Salaam had 1,005 active Airbnb listings, while Zanzibar had 317. This growth shows that more property owners are jumping into the short-term rental market, drawn by the potential for higher income. The average daily rates for these rentals are often higher than long-term leases, making them a lucrative option.
For property investors, this means that short-term rentals in tourist areas can be a profitable venture. The combination of high occupancy rates and attractive daily rates makes these properties appealing. As more tourists flock to Tanzania, the demand for short-term rentals is expected to continue rising, further driving up rents.
Sources: Airbtics Dar es Salaam, Airbtics Zanzibar, Tanzania Invest
5) Foreign buyers will target eco-friendly homes in Tanzania as global sustainability trends grow
There's a growing trend in the global housing market towards sustainable and eco-friendly options.
In Tanzania, this shift is evident as the country embraces sustainable architecture. Known for its top green buildings, Tanzania showcases designs that are both eco-conscious and energy-efficient. This aligns with efforts in Dodoma city, where the African Development Bank Group is working to create a resilient and green capital.
The Tanzanian government is actively promoting sustainable construction. Their National Development Vision 2025 emphasizes environmental sustainability, encouraging eco-friendly developments. This vision is supported by successful LEED-certified projects, showing a commitment to international standards.
Foreign buyers are increasingly interested in Tanzania's eco-friendly residential developments. This interest aligns with global sustainability trends, as more people seek homes that are not only beautiful but also environmentally responsible.
In Tanzania, the focus on green building is not just about aesthetics; it's about creating homes that can withstand climate change. The country's commitment to sustainability is evident in its policies and the growing number of eco-friendly projects.
As the world becomes more aware of climate change, Tanzania's approach to sustainable housing is attracting attention. The country's efforts to build resilient and inclusive communities are in line with the global demand for climate-resilient housing solutions.
Sources: African Development Bank Group, UNHCR, Constructive Voices, International Partnerships
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6) More foreign buyers will invest in Tanzania’s residential real estate because of favorable investment conditions
Foreign buyers are increasingly eyeing Tanzania's residential real estate market due to favorable investment conditions.
In recent years, Tanzania has seen a surge in Foreign Direct Investment, with a 20.8% increase in 2022 compared to the previous year. This uptick shows that investors have strong confidence in Tanzania's investment climate, which is a major draw for those looking to buy property. The Tanzanian government has been proactive, rolling out policies and reforms to make real estate investment more attractive to foreigners.
These government initiatives have been a game-changer, making the market more appealing to international investors. The country's stable political and economic conditions also provide a sense of security and stability, which is crucial for foreign buyers. The affordability of Tanzanian real estate compared to other global markets is another big plus, making it an attractive option for those looking to invest.
Infrastructure improvements have been significant, with better roads and airports enhancing connectivity and accessibility. This has opened up new areas for real estate development, further fueling interest from foreign buyers. The combination of these factors has made Tanzania's residential real estate market increasingly appealing.
Foreign investors are particularly drawn to the comparative affordability of Tanzanian properties. The improved infrastructure and transportation networks have made it easier to access different regions, which is a big selling point. These developments have contributed to the growing interest in Tanzania's real estate market.
With all these elements in play, it's no wonder that foreign buyers are setting their sights on Tanzania. The country's real estate market is poised for growth, and international investors are taking notice.
Sources: Bank of Tanzania, Statista, Zurich Insurance
7) Residential property prices in Dodoma will rise steadily as it strengthens its role as the capital city
Dodoma's residential property prices are on the rise, and it's not by chance.
The city's population has been booming, nearly doubling from 2012 to 2022, thanks to the government's move to shift administrative functions from Dar es Salaam to Dodoma. This shift is not just a temporary spike; experts predict the population will double again by 2040, which means more people will need homes.
Infrastructure is another big player here. The Tanzanian government is pouring money into projects like the Dodoma City Outer Ring Road and Msalato Airport. These aren't just roads and runways; they're job creators and city enhancers, making Dodoma a hot spot for property investment.
With the government functions moving, more employees are settling in Dodoma, which naturally increases the demand for housing. The government is also rolling out policies to make home ownership easier, like affordable housing schemes and mortgage facilities. These initiatives are set to boost demand and push property prices even higher.
For those considering buying property, Dodoma is becoming increasingly attractive. The city's transformation is not just about new buildings; it's about creating a vibrant community where people want to live and work. This makes it a prime location for long-term investment.
As Dodoma solidifies its status as the capital, the steady increase in property prices seems inevitable. The combination of population growth, infrastructure development, and government policies is creating a perfect storm for real estate growth.
Sources: African Development Bank Group, The Citizen, Mrisho Consult
8) Demand for compact and efficient homes will rise in Tanzanian cities due to urbanization
Urbanization in Tanzania is booming, with Dar es Salaam on track to become a megacity by 2035.
As more people flock to cities, the urban population is expected to hit 45 million by 2030, driving up the demand for housing. The Tanzania Urbanisation Laboratory (TULab) suggests that compact and efficient residential units are the way forward. This strategy helps cities grow without sprawling, which can lead to infrastructure headaches and environmental problems.
The rising middle class in Tanzania is also leaning towards city life, often looking for homes with modern amenities. This shift means smaller, more efficient living spaces are becoming popular, offering city conveniences without the hefty price tag of larger properties.
In the real estate market, there's a noticeable trend towards smaller housing units. Rising land and housing costs in city centers make compact housing a smart choice for both developers and residents. As land prices climb, these smaller units become more attractive and practical.
Infrastructure upgrades, like better public transportation, are making compact residential areas more appealing. These improvements mean people can live in smaller spaces near transport hubs, cutting down on the need for personal cars and promoting a greener urban lifestyle.
With these changes, urbanization is set to boost demand for compact and efficient homes in Tanzania's cities, reshaping the housing landscape. Developers and city planners are taking note, focusing on creating spaces that meet the needs of a growing urban population.
Sources: World Bank, ESRF, Urban Transitions, National Housing Corporation, New Climate Economy
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Tanzania. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
9) Interest in traditional single-family homes will drop as more people prefer urban living
In Tanzania, urban living is becoming more popular as people move away from traditional single-family homes.
With urbanization on the rise, Tanzania's urban population has been growing by 5.2% each year. This trend is expected to continue, with more than half of the population likely to live in cities by mid-century. The buzz around city life is not just about numbers; it's about the lifestyle and opportunities that urban areas offer.
There's a noticeable demand for apartments and condos, thanks to projects like the Tanzania Cities Transforming Infrastructure and Competitiveness (TACTIC). This initiative is all about enhancing urban infrastructure and management, making city living more appealing. People are drawn to the convenience and amenities that come with urban spaces.
The government is also playing a big role in this shift. They're pushing for urban development with policies focused on sustainable growth. Investments in infrastructure and connectivity are key, as they support the urban lifestyle that many are now chasing. This is evident in the rising property prices in cities, which show a strong interest in urban real estate.
For those considering buying property, it's worth noting that urban areas are becoming hotspots. The appeal lies in the improved infrastructure and services that come with city living. As more people flock to urban centers, the demand for housing in these areas is only set to increase.
So, if you're thinking about investing in property, keep an eye on the urban market. The shift towards city living is not just a trend; it's a movement that's reshaping the real estate landscape in Tanzania.
Sources: Trading Economics, World Bank, New Climate Economy
10) Rents in Tanzania's major cities will rise as more people move to urban areas
Tanzania's urban population is growing rapidly, with more people moving to cities each year.
Many are leaving rural areas for bustling cities like Dar es Salaam, Arusha, and Mwanza, despite a slight dip in net migration rates in 2024. This shift is creating a vibrant urban scene but also comes with its challenges.
One major issue is the shortage of affordable housing. With a housing deficit of about 3 million units and a yearly demand for 200,000 new homes, finding a place to live is becoming tougher. This imbalance is pushing rental prices up.
Adding to the pressure, the cost of living in cities is rising. Building materials and land are getting pricier, making homeownership a distant dream for many. As a result, more people are turning to rentals, further driving demand.
Real estate experts note that rental prices are on the rise, reflecting the growing need for housing. This trend is expected to continue as more people flock to urban areas.
Sources: IPP Media, Africa24, New Climate Economy
11) Rents in rural Tanzania will rise more slowly than in urban areas
Rural areas in Tanzania will see slower rent increases compared to bustling urban centers.
In cities like Dar es Salaam, economic activity is booming, with urban areas generating over half of Tanzania's GDP. This makes them the country's economic powerhouses, attracting more people and businesses.
Urban population growth is outpacing rural areas, with 23% of the population living in cities but contributing a whopping 51% to the GDP. This urbanization trend is pushing up the demand for housing, which in turn drives up rents.
The government is heavily investing in urban infrastructure, focusing on improving roads and public transport in cities. This makes urban living more attractive and accessible, further increasing the demand for housing.
Surveys indicate that housing demand is significantly higher in urban centers due to economic opportunities and better living conditions. This demand is a key factor in the rising property prices and rents in these areas.
Sources: World Bank, New Climate Economy, Africanvestor
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12) Better roads will boost residential investment in previously hard-to-reach areas
Improved road infrastructure can make previously hard-to-reach areas much more attractive for residential investment.
Take Mtumba, for instance, where the construction of 58.5 kilometers of tarmac roads has led to a noticeable rise in property values. This development has made the area more appealing for those looking to invest in residential properties. It's a clear example of how better roads can transform a region's real estate market.
In Tanzania, the road network has expanded by 32.6% over the past few years, growing from 108,946 kilometers to 144,429 kilometers. This expansion has opened up remote areas, sparking interest in residential development. As roads reach new places, the demand for residential plots naturally increases, making these areas ripe for investment.
Government incentives are also a big part of the picture. The Tanzanian government has ramped up funding for road construction and maintenance, creating a supportive environment for residential development. This is all part of a broader strategy outlined in the Third National Five-Year Development Plan (FYDP III) 2021/22 - 2025/26, which aims to boost infrastructure and, in turn, residential investment.
By June 2023, the construction of weather-resistant road networks in districts had exceeded targets, leading to a surge in construction, including residential projects. This increased activity highlights how new road access can make these regions even more attractive for development.
With better roads, areas that were once off the radar are now on the map for potential homeowners and investors. The improved infrastructure not only boosts property values but also enhances the overall appeal of these regions, making them prime spots for residential investment.
13) Demand for affordable housing in Tanzanian cities will grow as the youth population increases
Tanzania's youth population is booming, with a significant portion of the population under 35.
By 2025, Tanzania's population is expected to grow by 10 million, and 75% of these will be young people. This means a lot of young adults will be looking for jobs and homes, especially in cities where opportunities are more plentiful.
Urbanization is picking up speed, with urban areas growing by 5.2% annually over the last decade. By mid-century, more than half of Tanzanians are expected to live in cities. This shift is largely due to young people moving from rural areas to urban centers, chasing better job prospects and, in turn, driving up the demand for housing.
But there's a catch. Cities like Dar es Salaam are experiencing a significant affordability gap in housing. Many young people, often with limited budgets, struggle to find affordable places to live. This highlights the urgent need for more affordable housing options to support the growing youth population in urban areas.
For potential property buyers, this trend signals a promising opportunity. Investing in affordable housing could meet the rising demand from young urban dwellers and offer a solid return.
Understanding these dynamics can give you an edge in the market. As Tanzania's cities expand, the need for affordable housing will only grow, making it a sector worth watching.
Sources: Sensa NBS, Trading Economics, New Climate Economy
14) More high-rise residential buildings will appear in Tanzania’s cities because land is scarce
Tanzania's urban population is booming, with projections showing a jump from over 25 million in 2023 to 45 million by 2030.
As cities swell, land prices are climbing, making it tough to find affordable plots. This surge in demand is pushing developers to think vertically, opting for high-rise buildings as a smart solution to the land crunch.
In bustling cities like Dar es Salaam, land scarcity is a real challenge. The government is pushing for strategic urban planning, focusing on vertical development to make the most of limited space.
High-rise residential buildings are not just a trend; they're becoming a necessity. With more people flocking to urban centers, these towering structures offer a way to house more residents without sprawling outwards.
Insider knowledge suggests that investors are eyeing these developments as prime opportunities. The shift towards taller buildings is reshaping the skyline and the real estate market.
For potential buyers, this means new opportunities in urban living, with modern amenities and a chance to be part of a rapidly evolving cityscape.
Sources: ESRF Tanzania Urbanization Laboratory, New Climate Economy, Mrisho Consult
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.
15) Demand for homes in Kilimanjaro will rise as more expats and tourists show interest
The Kilimanjaro region is seeing a surge in popularity among expatriates and tourists, driving up the demand for homes.
In 2023, Tanzania welcomed a record-breaking number of tourists, with 1,808,205 visitors marking a 24.3% increase. Many are drawn to Kilimanjaro's breathtaking landscapes, making it a hotspot for those looking to invest in property.
The Tanzanian government is stepping up its game by investing in infrastructure to support this influx. They're improving roads and airports, which boosts the region's appeal for both tourists and expatriates who value convenience and modern amenities.
Kilimanjaro International Airport is now offering almost daily flights to major cities like Amsterdam, Istanbul, and Doha. This enhanced connectivity makes it easier for people to visit and settle, further increasing the demand for homes in the area.
With these developments, the Kilimanjaro region is becoming a prime spot for real estate investment. The combination of natural beauty and improved infrastructure is a magnet for those seeking a new home or a vacation property.
As more expatriates and tourists flock to the area, the demand for residential properties is expected to keep rising. This trend is turning Kilimanjaro into a vibrant community with a mix of cultures and lifestyles.
Sources: Tanzania Invest, Serengeti, Tanzania Real Estate Market
16) Tanga will attract more residential investments because of its strategic port developments
Tanga is quickly becoming a prime spot for residential investments, thanks to its bustling port developments.
The port has undergone major upgrades, making it capable of handling large ships and increasing cargo flow. This is not just a win for the north-eastern part of Tanzania but also for neighboring countries like Kenya and Uganda. The improvements have made Tanga a key player in regional trade.
With a hefty investment of 429.1 billion Tanzanian shillings, the port now boasts new berths and modern equipment. This has led to a 14% increase in vessel volumes over the past five years, significantly boosting trade and connectivity in the region.
The Tanzanian government is also pushing to make Tanga a logistics hub, which adds to its allure. Its strategic location near the Kenyan border and its role as a major port in the Indian Ocean corridor make it a focal point for economic growth and investment in East Africa.
For those considering buying property, Tanga's port developments mean more than just trade. The increased activity and investment in the area are likely to spur infrastructure improvements and job opportunities, making it an attractive place to live.
As Tanga continues to grow, it’s becoming clear that the port is not just a gateway for goods but also a catalyst for residential and economic development. The future looks bright for this coastal city.
Sources: Freight News, The Guardian, The Citizen
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.