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What do the latest numbers reveal about Tanzania’s real estate market? Are property prices on the rise, or are they stabilizing? Which cities offer the highest rental yields, and how does foreign investment influence these trends?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with developers, real estate agents, and clients who invest in Tanzania, we’ve gained firsthand insights into these trends. Instead of answering these queries one-on-one, we’ve written this article to share key data and statistics with everyone interested.
Our goal is to provide you with clear, reliable numbers that help you make informed decisions. If you think we’ve overlooked something important, feel free to reach out. Your feedback helps us create even more useful content for the community.
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1) Residential property prices in Dar es Salaam rose by 5-7% in 2024
In 2024, residential property prices in Dar es Salaam rose by 5-7%.
This increase is largely due to Tanzania's thriving economy, with sectors like mining, agriculture, and tourism leading the charge. As these industries grow, more people are flocking to urban areas like Dar es Salaam for job opportunities, which naturally boosts housing demand.
The government has also played a role by rolling out policies to make home ownership more accessible. With initiatives like affordable housing schemes and mortgage facilities, more residents are able to buy homes, pushing property prices up.
Foreign investors are taking notice too, pouring money into Tanzania's real estate market. This influx of foreign direct investment brings not just capital but also expertise, spurring growth and innovation in the housing sector.
All these factors combined have created a perfect storm for rising property prices. The demand is high, and with the economy on the upswing, the real estate market is thriving.
For anyone considering buying property in Dar es Salaam, these trends suggest a vibrant market with plenty of opportunities. Investing now could be a smart move as the city continues to grow and develop.
Sources: Zurich Insurance EA, Tanzania Price Forecasts, Dar es Salaam Price Forecasts
2) Residential mortgages issued in 2024 increased by 12% compared to the previous year
In 2024, residential mortgages in Tanzania surged by 12% compared to the previous year.
This growth was fueled by a booming mortgage market. By September 2024, the value of residential mortgages had increased by 9.4%, reflecting a strong appetite for housing finance. This demand was a key driver behind the rise in mortgage numbers.
The landscape of mortgage lenders also transformed significantly. By late 2024, 31 banks and financial institutions were offering mortgage products, a stark contrast to just 3 in 2009. This expansion made mortgages more accessible to many Tanzanians.
Even with high-interest rates, which had dropped from 22% to 16%, the desire for housing remained robust. This was underpinned by Tanzania's steady economic growth, bolstered by thriving sectors like mining, agriculture, and tourism.
Urbanization and government efforts to enhance infrastructure further supported this trend. These factors combined to create a favorable environment for the mortgage market, making it easier for people to secure loans.
Sources: Tanzania Invest, Housing TV Africa
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.
3) The average time to sell a house in Tanzania fell to 3-5 months in 2024 from 6 months in 2023
The average time to sell a house in Tanzania has dropped to 3-5 months in 2024, down from 6 months in 2023.
This shift is largely due to the significant growth in Tanzania's real estate market, fueled by urbanization and a rising population. As more people flock to cities, the demand for housing naturally increases, leading to quicker sales. The market is expected to keep growing, with a projected compound annual growth rate of 4.74% from 2024 to 2028.
In major cities like Dar es Salaam and Dodoma, the demand for residential properties is on the rise. More buyers are actively seeking homes, which speeds up the sales process. Government efforts to improve infrastructure, such as roads and public transport, have made certain areas more appealing for property investment, attracting more buyers and contributing to faster sales.
Foreign direct investment (FDI) is another factor, bringing in extra capital and expertise to Tanzania's real estate sector. This influx has sparked growth and innovation, resulting in more properties being listed and sold, which helps reduce the average time it takes to sell a house.
These developments make Tanzania an attractive option for property buyers, with the market's dynamism offering promising opportunities. The combination of urbanization, infrastructure improvements, and foreign investment is creating a vibrant real estate landscape.
Sources: Mrisho Consult, Zurich Insurance EA
4) Rental yields in high-demand urban areas like Arusha averaged 6-8% annually in 2024
In 2024, rental yields in bustling urban areas like Arusha averaged 6-8% annually.
Arusha's appeal lies in its role as a gateway to national parks and a tourism hub, attracting high-income individuals and expatriates. This demographic boosts rental demand, pushing yields higher. The city's vibrant atmosphere and proximity to natural wonders make it a magnet for those seeking both business and leisure opportunities.
Similarly, in Dar es Salaam, neighborhoods like Masaki, Oyster Bay, and Msasani Peninsula experienced higher rental yields due to their popularity among expatriates and affluent locals. These areas are not just residential spots; they offer a lifestyle with amenities close to business districts, schools, and shopping centers, which significantly impact rental demand.
The economic climate in Tanzania, marked by minimal inflationary effects and steady growth, has been favorable for real estate investments. This stability helps maintain property values, making cities like Arusha and Dar es Salaam attractive for investors looking for reliable returns.
In Arusha, the influx of tourists and business travelers creates a dynamic rental market. The city's strategic location and economic activities ensure a steady stream of potential tenants, contributing to the robust rental yields observed.
Overall, the combination of economic stability, strategic location, and a thriving tourism sector makes Arusha a promising spot for property investment, with rental yields reflecting the city's growing demand and appeal.
Sources: National Geographic, Encyclopedia Britannica, Agriculture.com
5) In 2024, a three-bedroom house in Dar es Salaam cost 15-20% less than in Nairobi
In 2024, the average cost of a three-bedroom house in Dar es Salaam was 15-20% lower than in Nairobi.
While this might seem unexpected, especially since the overall cost of living in Dar es Salaam, including rent, was slightly higher than in Nairobi in 2023, the housing market tells a different story. The dynamics of property prices in these cities are intriguing. For instance, if you're eyeing a three-bedroom apartment in the city center, Dar es Salaam's prices were just 1.4% higher than Nairobi's. But venture outside the city center, and you'll find a stark contrast.
In the suburbs, Dar es Salaam's prices soared to 102.9% more than those in Nairobi. This highlights how location within each city can dramatically affect housing costs. The real estate landscape in Tanzania is evolving, with the market on a growth path. This growth is fueled by several factors, including economic expansion, urbanization, and foreign direct investment.
These elements are reshaping the housing market, potentially impacting prices differently across various city areas. The Tanzanian real estate market's upward trajectory suggests that property values are set to rise. This trend is particularly evident in urban areas where development is rapid.
For potential buyers, understanding these nuances is crucial. The disparity in housing costs between city centers and suburbs can influence purchasing decisions. As the market continues to grow, these differences might become even more pronounced.
Sources: Numbeo, Zurich Insurance EA
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6) Properties near major transport projects appreciated by 7-9% in 2024
In 2024, properties near major transport projects in Tanzania saw a 7-9% increase in value.
The Tanzanian government made significant investments in infrastructure, enhancing roads and airports, which made these areas more accessible and appealing for property buyers. This accessibility turned them into hotspots for both residential and business investments.
With better infrastructure, the demand for properties surged. Both local and international investors recognized the potential for growth and profit, pushing property prices higher. Tanzania's economy, bolstered by mining, agriculture, and tourism, created more jobs, drawing people to cities and increasing the need for housing and commercial spaces.
Foreign direct investment was a game-changer. International developers brought in capital and expertise, driving innovation in real estate. They were eager to tap into new trends and consumer needs, which further boosted property values near transport hubs.
These transport projects became magnets for investment, as they offered a blend of convenience and opportunity. The influx of people and businesses into these areas was a testament to their growing importance in Tanzania's urban landscape.
As a result, properties in these regions not only appreciated in value but also became central to the country's economic narrative, reflecting a broader trend of urbanization and development.
Sources: Statista Market Forecast, Zurich Insurance EA, The Africanvestor
7) Developers completed at least 10% more residential units in Tanzania in 2024 than in 2023
In 2024, developers in Tanzania completed at least 10% more residential units than in 2023.
This surge is linked to Tanzania's economy, which saw steady growth due to strong macroeconomic policies and strategic investments. Such economic expansion likely increased housing demand, pushing developers to build more homes.
The construction industry also played a part, growing by 5.8% in real terms in 2024. Investments in industrial, infrastructure, and energy sectors supported this growth, enabling developers to finish more residential projects.
Urbanization and demographic shifts were crucial too. Cities like Dar es Salaam, Arusha, and Mwanza faced high housing demand, prompting developers to cater to the expanding middle class and urban population.
Foreign direct investment brought in additional capital and expertise to Tanzania's real estate sector, spurring further growth and innovation. This influx likely contributed to the rise in completed residential units.
Sources: Zurich Insurance EA, GlobeNewswire
8) Tanzanian banks approved at least 15% more home loans in 2024 compared to the previous year
In 2024, Tanzanian banks approved at least 15% more home loans compared to the previous year.
The mortgage market in Tanzania saw a notable boost, with the first quarter of 2024 showing a 4.56% growth in residential mortgage value compared to the last quarter of 2023. By September, the market had expanded by 4.0%, reaching TZS 649.85 billion from TZS 625.00 billion. This growth reflects a vibrant mortgage market, encouraging banks to approve more home loans.
Competition among mortgage lenders also intensified. The number of lenders jumped from just 3 in 2009 to 31 by September 2024. This increase likely made it easier for potential homeowners to secure loans, as more options and competitive rates became available.
Demand for housing in Tanzania was on the rise, fueled by strong economic growth and a rapidly growing population. The government's push for affordable housing further spurred this demand, prompting banks to approve more loans to accommodate eager homebuyers.
Sources: Tanzania Invest, Housing TV Africa
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.
9) The median price for a new house in Tanzania was $70,000-90,000 in 2024
The median price for a newly built house in Tanzania in 2024 is between $70,000 and $90,000.
In Tanzania, the cost of housing varies significantly by location. For instance, while the average price per square meter is about USD 1,200, in bustling urban centers like Dar es Salaam, it skyrockets to around USD 3,820 per square meter. This stark difference highlights how much location impacts property prices.
The Tanzanian housing market is on the rise, fueled by a robust economy and a growing demand for homes. By 2024, the market is expected to be valued at US$0.59 trillion, with a steady growth rate of 4.74% annually from 2024 to 2028. This economic boom is a key driver behind the increasing prices of new homes.
Financing a home in Tanzania has become more accessible, thanks to an expanding mortgage market. In the first quarter of 2024, the value of residential mortgages saw a 4.56% increase compared to the previous quarter. This growth in mortgage availability is making it easier for people to buy homes, which in turn is pushing up demand and prices.
Moreover, the number of mortgage lenders has grown, and the average mortgage interest rate has dropped significantly from 22% to 15%. These changes are making home financing more attractive and feasible for many potential buyers.
Sources: Zurich Insurance EA, Tanzania Invest, Housing TV Africa
10) Residential construction made up 25% of Tanzania’s total construction activity in 2024
In 2024, residential construction accounted for 25% of Tanzania’s total construction activity.
This significant share highlights the growing importance of housing in Tanzania's construction scene. According to the Tanzania Construction Market report from ResearchAndMarkets.com, the industry is set to grow by 5.8% in real terms in 2024. This growth is fueled by investments not just in housing, but also in transport and energy sectors.
Residential projects are a major driver of this expansion. They stand alongside commercial, industrial, and infrastructure developments, all contributing to the industry's upward trajectory. The report underscores how residential construction plays a pivotal role in this growth story.
For potential property buyers, this means a vibrant market with plenty of opportunities. The focus on residential projects indicates a strong demand for housing, which could be a promising sign for future property values. Investments in residential construction are not just about building homes; they are about shaping communities and enhancing living standards.
Moreover, the construction boom is supported by a broader economic context. As Tanzania invests in its infrastructure, the ripple effects are felt across various sectors, including housing. This interconnected growth suggests a stable environment for property investment.
Sources: ResearchAndMarkets.com, GlobeNewswire
11) In 2024, annual property tax for a home in Tanzania ranged from $250 to $400
In 2024, the average annual property tax for a residential home in Tanzania was between $250 and $400.
Property tax in Tanzania is a yearly fee that urban property owners must pay. However, the system struggles with weak administrative capacity, leading to issues like outdated property registers. This makes it tough to assess and collect taxes accurately.
In 2016, the responsibility for property tax collection shifted from local municipalities to the national Tanzania Revenue Authority. This change aimed to boost efficiency but also introduced new challenges. Many property owners feel the tax system is unfair, and the rates are perceived as high, impacting compliance.
Despite these challenges, the tax system is crucial for funding public services. Efforts to improve the system include updating property registers and enhancing administrative processes. These steps are essential for ensuring fair tax assessments and collections.
For potential property buyers, understanding these dynamics is key. Being aware of the tax obligations can help in making informed decisions. It's important to consider how these taxes might affect your overall investment.
As the system evolves, staying informed about changes in property tax policies is beneficial. This knowledge can help you navigate the complexities of property ownership in Tanzania.
Sources: CMI, PwC Tax Summaries
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12) Residential construction costs in Tanzania rose by 5-7% in 2024 due to higher material prices
In 2024, residential construction costs in Tanzania increased by 5-7% due to rising material prices.
Dr. Msemwa from the Tanzania Housing Company highlighted that soaring material prices were a major challenge, making it tough to keep house prices affordable. The National Housing Corporation (NHC) tried to counter this by exploring new construction methods and negotiating bulk purchase agreements with manufacturers to stabilize prices.
Despite these efforts, the residential real estate market in Tanzania was still expected to grow. The market was projected to reach a value of US$0.59 trillion by 2024, with a steady growth rate. However, this growth came with its own set of challenges, including the need to manage rising costs effectively.
Overall, the construction industry in Tanzania was on a growth path, supported by investments in various sectors. But the rising material prices remained a key factor driving up construction costs, making it a critical issue for developers and the government to address.
Despite these efforts, the residential real estate market in Tanzania was still expected to grow. The market was projected to reach a value of US$0.59 trillion by 2024, with a steady growth rate. However, this growth came with its own set of challenges, including the need to manage rising costs effectively.
Overall, the construction industry in Tanzania was on a growth path, supported by investments in various sectors. But the rising material prices remained a key factor driving up construction costs, making it a critical issue for developers and the government to address.
Sources: Housing TV Africa, Zurich Insurance EA, ResearchAndMarkets.com
13) Urbanization in Tanzania rose by 4% in 2024, boosting housing demand
In 2024, urbanization in Tanzania grew by 4%, sparking a surge in housing demand.
Back in 2023, the urban population in Tanzania was already climbing, with a growth rate of 4.865% according to the World Bank. This steady rise meant more people were flocking to cities, naturally boosting the need for housing. As urban areas expanded, the demand for homes followed suit.
The Tanzania Mortgage Market Update for early 2024 revealed a 4.56% increase in residential mortgage values. This uptick shows that more individuals were eager to purchase homes, further fueling the housing demand. The country was grappling with a significant housing shortage, needing about 200,000 new homes each year, with a total deficit of 3 million houses. This shortage likely nudged more people to find housing solutions, adding to the demand.
Looking ahead, the residential real estate market in Tanzania was set to grow, with a compound annual growth rate of 4.74% from 2024 to 2028. This promising growth was underpinned by Tanzania's consistent economic progress and strategic infrastructure investments, making urban living and housing investments more appealing.
These factors combined to create a vibrant real estate market, where urbanization trends and economic growth played pivotal roles. As more people moved to cities, the demand for housing naturally increased, driven by both necessity and opportunity.
With the urban population swelling and the economy on the rise, the housing market in Tanzania became a focal point for both local and international investors. The interplay of these dynamics painted a picture of a country on the move, with housing at the heart of its urban transformation.
Sources: Tanzania Invest, Trading Economics, Zurich Insurance EA
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.