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Choosing between Zanzibar and Dar es Salaam for property investment requires understanding the fundamental differences between these two Tanzanian markets. Zanzibar offers beachfront opportunities with lower entry costs but limited infrastructure, while Dar es Salaam provides urban stability with higher property values and better amenities.
Both cities operate under Tanzania's leasehold system for foreigners, but each market has distinct characteristics that affect investment returns, lifestyle quality, and long-term property appreciation potential.
If you want to go deeper, you can check our pack of documents related to the real estate market in Tanzania, based on reliable facts and data, not opinions or rumors.
Zanzibar land costs $20-$120 per square meter compared to Dar es Salaam's $1,200 average, making it significantly more affordable for entry-level investors.
Dar es Salaam offers better infrastructure, healthcare, and educational facilities, while Zanzibar provides higher rental yields of 8-15% versus 6-9% in the commercial capital.
| Factor | Zanzibar | Dar es Salaam |
|---|---|---|
| Land Price (per sqm) | $20-$120 beachfront | $1,200 average, up to $3,820 |
| Apartment Prices | $50,000-$160,000 (2-bed) | $36,000+ economy, $1,200/sqm avg |
| Rental Yields | 8-15% (beachfront areas) | 6-9% (prime urban) |
| Airbnb Occupancy | 40% ($7,000/year avg) | 48% ($8,000/year avg) |
| Resale Timeline | 3-9 months | 2-6 months |
| Infrastructure Quality | Improving, periodic outages | Reliable, some suburban strain |
| Healthcare/Schools | Limited international options | Best in Tanzania |
Fact-checked and reviewed by our local expert
Grace Makoye 🇹🇿
Manager of Operations, Zinza Real Estate
How much does land cost per square meter right now in central Zanzibar compared to central Dar es Salaam?
Central Zanzibar land costs between $20 and $120 per square meter for beachfront plots as of September 2025.
The median price range sits around $35-$60 per square meter for most central Zanzibar locations. Prime beachfront areas command the highest prices at $100-$120 per square meter, while slightly inland central plots start from $20-$25 per square meter.
Central Dar es Salaam land averages around $1,200 per square meter for residential properties. Premium city-center locations reach up to $3,820 per square meter, making Dar es Salaam land approximately 10-60 times more expensive than Zanzibar depending on the specific location.
The dramatic price difference reflects Dar es Salaam's status as Tanzania's commercial capital with concentrated urban demand, while Zanzibar's island geography provides more available beachfront development opportunities.
It's something we develop in our Tanzania property pack.
What are the average prices for finished apartments or houses in both Zanzibar and Dar es Salaam today?
Zanzibar finished apartments range from $50,000 for studios in lesser-known areas to $160,000 for typical two-bedroom units in central or desirable tourist areas.
Luxury villas or beachfront estates in Zanzibar can exceed $1 million, with most premium properties falling between $285,000 and $1.3 million. The wide price range reflects the significant difference between basic accommodation and high-end resort-style properties.
Dar es Salaam apartments generally start at about $36,000 in developing neighborhoods but average $1,200 per square meter citywide. A typical two-bedroom apartment in a decent area costs $80,000-$150,000, while upscale units in prime locations cost significantly more.
The apartment market in Dar es Salaam shows more consistent pricing per square meter compared to Zanzibar's location-dependent pricing structure. Urban apartments in Dar es Salaam also tend to have better build quality and modern amenities as standard features.
How easy is it for foreigners to buy and hold property legally in Zanzibar versus Dar es Salaam?
Both Zanzibar and Dar es Salaam operate under the same fundamental restriction: foreigners cannot directly own land and must use government-registered long-term leaseholds.
In Zanzibar, the process goes through the Zanzibar Investment Promotion Authority (ZIPA) with leases available in 33, 66, or 99-year increments. These leases are renewable and inheritable, providing long-term security for foreign investors.
Dar es Salaam and mainland Tanzania use the Tanzania Investment Centre (TIC/TISEZA) for the same leasehold process with similar restrictions. The maximum lease period is 99 years, and freehold ownership remains strictly prohibited for foreigners.
Both systems require government approval, but the processing timelines and requirements are essentially equivalent. The main difference lies in the governing authorities rather than the ease of acquisition.
What are the main restrictions on foreign property ownership in Zanzibar compared to Dar es Salaam?
| Restriction Type | Zanzibar | Dar es Salaam |
|---|---|---|
| Ownership Structure | Leasehold only via ZIPA | Leasehold only via TIC/TISEZA |
| Maximum Lease Period | 99 years (33/66/99 increments) | 99 years maximum |
| Prohibited Areas | Agricultural, village, military zones | Village land (must be converted) |
| Annual Obligations | Ground rent $0.35/sqm urban | Annual property tax varies |
| Transfer Requirements | Government approval required | Strict compliance for derivative titles |
| Stamp Duty | 5% of transaction value | 1-4% of property value |
| Inheritance Rights | Leases are inheritable | Leases are inheritable |
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How strong is the short-term rental market, like Airbnb, in Zanzibar compared to Dar es Salaam?
Dar es Salaam has a larger and more stable short-term rental market with approximately 1,167 active Airbnb listings compared to Zanzibar's 383 listings.
Zanzibar achieves a 40% occupancy rate with average annual revenue of $7,000 per unit. The market experiences strong seasonality with peak occupancy and pricing during tourist high seasons, but significantly lower booking rates outside these periods.
Dar es Salaam maintains a higher 48% occupancy rate with average annual revenue of $8,000 per unit. Premium units in Dar es Salaam can earn up to $12,000 per year, and the market shows less seasonal variation than Zanzibar.
Most guests in Dar es Salaam are international business visitors, while Zanzibar attracts primarily leisure tourists. Both cities experience peak demand in July and during holiday seasons, but Dar es Salaam's business travel component provides more year-round stability.
What kind of long-term rental yields can investors expect in Zanzibar versus Dar es Salaam?
Zanzibar delivers higher rental yields ranging from 8% to 15% annually, with the strongest performance in prime beachfront or tourist area properties.
Properties in central Zanzibar or popular areas like Stone Town and beachfront locations consistently achieve yields in the 12-15% range. Even properties in secondary locations typically generate 8-10% annual yields.
Dar es Salaam prime areas offer more modest but stable yields of 6% to 9%, with mainstream neighborhoods typically yielding 5%-7%. The lower yields reflect higher property purchase prices but also indicate a more mature and stable rental market.
Zanzibar's higher yields come with greater seasonality risk and dependence on tourism flows, while Dar es Salaam's yields benefit from consistent demand from the business community and expatriate workers.
It's something we develop in our Tanzania property pack.
How reliable are infrastructure services like electricity, water, and internet in Zanzibar compared to Dar es Salaam?
Dar es Salaam generally provides more reliable infrastructure services, though both cities face ongoing development challenges.
Zanzibar's electricity supply has improved rapidly in recent years, but high-investment tourist zones still experience periodic outages or low voltage during peak demand periods. Ongoing infrastructure investment aims to upgrade grid capacity and introduce new power sources.
Water and internet coverage in Zanzibar are expanding but can be disrupted during peak tourism seasons or in remote areas. The island's infrastructure development continues but remains limited compared to mainland urban centers.
Dar es Salaam's power supply is generally more reliable, though urban growth strains the network and causes occasional outages, especially in peripheral neighborhoods. Water access is reliable in most central areas, and internet speed and coverage rank among the best in Tanzania.
What are the most common property taxes, transfer fees, and ongoing maintenance costs in Zanzibar and Dar es Salaam?
| Cost Category | Zanzibar | Dar es Salaam |
|---|---|---|
| Stamp Duty | 5% of total transaction | 1-4% of property value |
| Registration Fee | Variable amount | Variable amount |
| Annual Ground Rent | $0.35 per sqm (urban) | Included in property tax |
| Property Tax | Flat annual rate (varies by district) | 18,000 TZS standard building |
| Maintenance Costs | Higher for beachfront/luxury | Lower for urban apartments |
| Weather Impact | Higher due to coastal exposure | Standard urban wear |
| Service Availability | Limited repair services | Full range of contractors |
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 stable are property values in Zanzibar compared to Dar es Salaam over the past five years?
Both markets have shown steady appreciation with similar annual growth rates of 5-7% citywide over the past five years.
Zanzibar has experienced consistent growth driven by tourism demand and expatriate investment interest. Luxury and tourist areas have achieved up to 20% yearly increases during peak years, significantly outperforming the general market.
Dar es Salaam enjoys similar overall growth rates of 5-7% annually, supported by rapid urbanization and infrastructure development projects. Prime districts have outperformed the city average and remain relatively resilient to price drops.
Both markets demonstrate stability compared to many emerging market real estate sectors. Zanzibar shows higher volatility in luxury segments, while Dar es Salaam displays more consistent performance across different property types and locations.
What are the risks of political or regulatory changes that could impact property rights in Zanzibar versus Dar es Salaam?
Both markets face similar regulatory risks since foreign property rights depend on government leasehold policies that could be modified through legislative changes.
Zanzibar's semi-autonomous status means regulations may diverge from mainland Tanzania policies. This creates both opportunities for more favorable local policies and risks from independent regulatory changes.
Past years have seen incremental reforms in both jurisdictions but no major disruptions to existing property rights. However, periodic regulatory changes affecting lease renewal procedures and property taxation for foreigners should be monitored.
The leasehold system itself provides inherent protection since existing agreements are typically honored even when regulations change. Both markets maintain stable political environments with respect for existing property investments.
It's something we develop in our Tanzania property pack.
How easy is it to resell a property in Zanzibar compared to Dar es Salaam, and how long does it usually take?
Dar es Salaam offers faster and more predictable resale timelines with urban apartments and houses selling in 2-6 months in prime areas.
Well-located properties in Dar es Salaam that are priced correctly typically find buyers within 2-4 months. Properties priced above market average or in less desired neighborhoods can take longer, sometimes extending to 8-12 months.
Zanzibar resale timelines average 3-9 months for well-priced properties, with beachfront and resort properties in high demand. Properties off the beaten path or in less popular areas may take significantly longer to sell.
Both markets have active demand for quality properties, but Dar es Salaam benefits from a larger pool of potential buyers including local businesses, expatriates, and investors. Zanzibar's buyer pool consists primarily of tourism investors and expatriates seeking lifestyle properties.
How do lifestyle factors like healthcare, schools, transportation, and daily living compare between Zanzibar and Dar es Salaam for someone planning to live there full time?
Dar es Salaam provides superior urban conveniences and essential services for full-time residents.
Healthcare in Dar es Salaam includes the best hospitals and medical facilities in Tanzania, with international-standard private clinics and specialists. Zanzibar has improving healthcare but often requires mainland visits for serious medical treatment.
Educational options strongly favor Dar es Salaam, which offers numerous international schools and universities. Zanzibar has some international schools but significantly fewer options for expatriate families.
Transportation in Dar es Salaam includes robust public and private options, including buses, taxis, and ride-sharing services. Zanzibar relies primarily on taxis, private cars, and informal minibuses, with limited public transportation infrastructure.
Daily living costs are slightly higher in Dar es Salaam, but urban amenities including shopping, entertainment, dining, and cultural activities are vastly superior. Zanzibar offers a quiet, tropical lifestyle but with limited options outside tourist-oriented businesses.
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 presents a compelling option for investors seeking higher rental yields and lower entry costs, particularly those interested in tourism-related properties and beachfront investments.
Dar es Salaam suits investors prioritizing market stability, better infrastructure, and superior lifestyle amenities, though with higher initial investment requirements and more moderate returns.
Sources
- BambooRoutes - Average Price per Square Meter Tanzania
- TheAfricanVestor - Dar es Salaam Property
- BambooRoutes - Average Property Price Zanzibar
- World Estate - Pros and Cons of Buying Property in Zanzibar
- BambooRoutes - Average Price per Square Meter Dar es Salaam
- TheAfricanVestor - Foreigners Buy Land Zanzibar
- TheAfricanVestor - Zanzibar Property
- Airbtics - Annual Airbnb Revenue in Zanzibar Tanzania
- Airbtics - Annual Airbnb Revenue in Dar es Salaam Tanzania
- BambooRoutes - Average Rental Yield Zanzibar