Authored by the expert who managed and guided the team behind the Tanzania Property Pack
Everything you need to know before buying real estate is included in our Republic of the Congo Property Pack
Tanzania's property market in 2025 stands as one of Africa's most dynamic investment destinations. With property prices surging 86.65% over the past five years and rental yields reaching 8-12% in prime locations, this East African nation presents compelling opportunities for both investors and homebuyers seeking value appreciation and income generation.
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.
Tanzania's residential property market offers attractive entry points from $36,000 for starter homes, with Dar es Salaam city center apartments averaging $300 per sqm and Zanzibar reaching up to $3,700 per sqm in premium locations.
The market delivers strong rental yields of 6-12% depending on location and property type, with particular strength in short-term holiday rentals in tourist areas like Zanzibar and urban centers like Dar es Salaam.
| Location | Average Price per sqm | Rental Yield Range | Price Growth (5yr) |
|---|---|---|---|
| Dar es Salaam Center | $300 | 6-7% | 5-7% annually |
| Dar es Salaam Suburbs | $625 | 6-8% | 3-5% annually |
| Zanzibar Center | $3,700 | 8-12% | 8-10% annually |
| Zanzibar Suburbs | $1,100 | 6-8% | 6-8% annually |
| Dodoma | $800-1,200 | 6-8% | 4-6% annually |
| Arusha | $700-1,100 | 6-8% | 4-6% annually |
Fact-checked and reviewed by our local expert
Grace Makoye 🇹🇿
Manager of Operations, Zinza Real Estate
What are the current average property prices in Tanzania by area and property type?
Property prices in Tanzania vary dramatically based on location and property type, with premium areas commanding significantly higher values than developing regions.
In Dar es Salaam's city center, apartments average $300 per sqm, translating to total property values between $100,000 and $440,000 for typical units. The suburbs offer more affordable options at around $625 per sqm, with properties ranging from $36,000 to $190,000.
Zanzibar represents the premium end of Tanzania's property market, with city center properties reaching up to $3,700 per sqm and total values between $200,000 and $600,000 for quality properties. Zanzibar's suburban areas are more accessible at $1,100 per sqm, with properties typically priced between $80,000 and $300,000.
Secondary cities like Dodoma and Arusha offer more affordable entry points, with Dodoma properties averaging $800-$1,200 per sqm and typical residential properties ranging from $50,000 to $150,000. Arusha follows similar patterns at $700-$1,100 per sqm, with properties generally valued between $60,000 and $200,000.
By property type, studios start from $30,900-$32,100 for 30 sqm units, while standard city apartments of 60 sqm cost $61,800-$64,200. Townhouses of 150 sqm command $288,400-$299,600, and luxury villas of 100 sqm range from $206,000 to $214,000.
How have property prices changed over the past 5 years and what are the future trends?
Tanzania's property market has experienced exceptional growth, with national average prices rising 86.65% over the five-year period from 2020 to 2025.
This growth has significantly outpaced inflation and most neighboring East African markets, establishing Tanzania as one of the region's strongest performing property markets. Annual price growth varies by location, with urban centers typically seeing 3-7% increases, Dar es Salaam achieving 5-7% annually, and Zanzibar leading with 8-10% annual appreciation.
Short-term trends show continued momentum, with ongoing 3-7% price increases driven by infrastructure development and urban migration patterns. The government's investment in transportation networks and urban development projects continues to support property values across major cities.
Medium-term projections over the next five years indicate sustained growth, particularly in urban corridors and tourist destinations. Infrastructure projects including improved transportation links and urban development initiatives are expected to maintain upward pressure on property values.
Long-term trends over the next decade appear highly favorable, with Tanzania's urban population expected to double, creating sustained demand for residential properties and supporting continued value appreciation across all major markets.
What rental yields can you realistically expect in different cities and property types?
Tanzania's rental market offers attractive yields that compare favorably with many global property markets, particularly for investors focusing on tourist and business centers.
| Location/Property Type | Gross Rental Yield | Best Property Types |
|---|---|---|
| Dar es Salaam Prime | 6-7% | City center apartments, suburban homes |
| Zanzibar Tourist Areas | 6-8% (up to 12%) | Holiday villas, beachfront properties |
| Zanzibar Suburban | 8-12% | Short-term rental villas |
| Arusha | 6-8% | Expat-focused properties |
| Dodoma | 6-8% | Government worker housing |
| Mwanza | 6-8% | Business district properties |
| Short-term/Airbnb | 10-12% | Tourist and business hubs |
The highest yields come from short-term holiday rentals in tourist destinations, particularly in Zanzibar's Paje, Nungwi, and Kendwa areas, where properly managed properties can achieve 10-12% gross yields.
It's something we develop in our Tanzania property pack.
How does rental demand differ between short-term, long-term, and holiday lets?
Tanzania's rental market segments show distinct demand patterns that directly impact investment strategies and returns.
Short-term and holiday lets are experiencing explosive growth, particularly in Zanzibar, Arusha, and Dar es Salaam's upmarket areas like Msasani and Masaki. These properties benefit from Tanzania's growing tourism sector and increasing business travel, delivering higher yields but requiring more active management and marketing efforts.
Long-term rental demand remains steady and predictable, especially in secondary cities like Dodoma and affordable Dar es Salaam suburbs. This segment offers lower vacancy rates and reduced management intensity, making it attractive for investors seeking stable, hands-off income streams.
Urban expat demand creates a premium rental segment in areas like Masaki, Oyster Bay, and Msasani, where international professionals and diplomats seek quality housing. This market segment commands higher rents and typically involves longer lease terms with more reliable tenants.
Holiday lets in tourist areas face seasonal fluctuations but can achieve premium rates during peak seasons, particularly in Zanzibar's beach areas and Arusha's safari gateway locations. Success in this segment requires understanding tourist patterns and providing appropriate amenities and services.
What are the transaction costs, taxes, and ongoing fees for property ownership?
Property ownership in Tanzania involves several upfront costs and ongoing expenses that buyers must factor into their investment calculations.
Initial transaction costs include stamp duty at 1% of the purchase price, registration fees of 0.25%, and legal or notary fees ranging from 2-5% of the property value. Agent commissions typically range from 5-10% and are usually paid by the buyer.
Ongoing ownership costs include annual land rent and property taxes, with property tax rates varying by property type. Single houses face an annual property tax of TZS 18,000 (approximately $6.70), while multi-story properties pay TZS 90,000 (approximately $33.60) per floor per year.
Capital gains tax applies at 3% when selling properties, making it relatively affordable compared to many international markets. This low rate supports the market's liquidity and makes Tanzania attractive for property investors focused on capital appreciation strategies.
Additional costs may include property management fees for rental properties, maintenance and repairs, insurance, and utilities if not passed through to tenants. These ongoing expenses typically range from 1-3% of property value annually depending on property type and management requirements.
Don't lose money on your property in Tanzania
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
How liquid is Tanzania's real estate market and how long does it take to resell?
Tanzania's property market offers moderate liquidity that varies significantly by location, property type, and pricing strategy.
Well-located city properties in prime areas typically sell within 2-6 months when priced appropriately for current market conditions. Properties in Dar es Salaam's established neighborhoods like Masaki and Oyster Bay, or quality properties in Zanzibar's tourist areas, generally find buyers relatively quickly due to consistent demand from both local and international buyers.
Rural and secondary location properties take considerably longer to sell, often requiring 6-18 months or more depending on price positioning and local growth prospects. Properties in developing areas or those lacking infrastructure access face the longest sale periods and may require significant price adjustments to attract buyers.
The fastest resales occur in urban centers, established tourist destinations, and areas benefiting from new infrastructure development. Properties near planned transportation links, government projects, or tourism developments typically sell faster and at premium prices.
Market liquidity continues to improve as Tanzania's economy develops and more institutional buyers enter the market, but sellers should still plan for longer sale periods compared to mature international property markets.
Which areas are projected to grow fastest in value and which are stagnating?
Tanzania's property market growth varies dramatically by location, with clear winners and areas facing challenges.
The fastest growth areas include Zanzibar's prime locations like Paje, Stone Town, and Nungwi, which benefit from booming tourism and limited land supply. In Dar es Salaam, established upmarket areas like Masaki, Oyster Bay, and the emerging Mbezi Beach corridor show strong appreciation potential due to infrastructure improvements and expatriate demand.
Dodoma's growth as Tanzania's political capital continues to drive property values, supported by government investment and population growth. Mwanza and Ilemela benefit from their positions as major commercial centers serving Tanzania's interior regions.
Moderate growth areas include secondary cities and suburban locations that lack major infrastructure upgrades but maintain steady local demand. These areas typically track national economic growth without significant premiums.
Stagnant or declining areas include overbuilt suburban locations, areas lacking infrastructure development, and remote locations without clear economic drivers. Properties in these areas may struggle to maintain value and face longer sale periods.
Future growth will likely concentrate around infrastructure projects, tourism development, and areas benefiting from Tanzania's urbanization trends.
What is the minimum budget required and what can you buy at different price points?
Tanzania's property market offers entry points for various budget levels, making it accessible to both modest investors and luxury buyers.
1. **$36,000-$50,000**: Starter apartments or small homes in developing Dar es Salaam suburbs or outlying areas. These typically offer 30-40 sqm of space and provide affordable homeownership or rental investment opportunities.2. **$50,000-$100,000**: Improved suburban properties, small apartments in secondary cities, or land plots in growth areas. This budget allows for better locations and larger properties with stronger rental potential.3. **$100,000-$200,000**: Quality city apartments, townhouses in good neighborhoods, or small commercial properties. This range provides access to established areas with strong rental yields and appreciation potential.4. **$200,000-$300,000**: Premium urban properties, quality Zanzibar locations, or larger townhouses in prime areas. Properties in this range typically offer excellent rental returns and strong capital growth prospects.5. **$300,000+**: Luxury properties including city penthouses, beachfront villas in Zanzibar, or premium commercial properties. This segment offers the highest quality and often the strongest long-term appreciation potential.The minimum viable investment budget of $36,000-$50,000 provides genuine opportunities for property ownership and investment returns, making Tanzania accessible to international buyers with modest budgets.
How do returns compare between buying to live, rent out, or resell later?
Investment strategy significantly impacts returns in Tanzania's property market, with each approach offering distinct advantages and risks.
Buy-to-live strategies provide no immediate financial returns but offer protection against Tanzania's rising rental costs and build equity over time. This approach works best for expatriates planning long-term residence or locals seeking to avoid rent increases in appreciating markets.
Long-term rental strategies typically generate 6-7% gross yields with lower management requirements and more predictable income streams. This approach offers steady cash flow plus capital appreciation, making it suitable for hands-off investors seeking regular income.
Holiday rental strategies can achieve 8-12% gross yields in prime tourist locations but require active management, marketing expertise, and higher operational costs. Success depends heavily on location, property quality, and management effectiveness.
Resale-focused strategies target 3-7% annual appreciation, with potential for substantial gains over 5-10 year periods. This approach requires careful area selection, timing, and market knowledge but can deliver significant returns in growth locations.
It's something we develop in our Tanzania property pack.
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.
What risks do foreign investors face in Tanzania's property market right now?
Foreign property investment in Tanzania involves several risk categories that require careful consideration and professional guidance.
Transaction and access risks include high upfront costs, limited mortgage availability for foreign buyers, and restrictions on certain business activities including property agency and brokerage operations. Foreign investors typically need local partners or legal representation to navigate these requirements effectively.
Legal and regulatory risks stem from periodic policy changes and evolving licensing, land, and tax regulations. The legal framework continues developing, which can create uncertainty around dispute resolution and arbitration processes. Title verification and due diligence become critical to avoid ownership disputes.
Market liquidity risks affect resale timelines and pricing flexibility, as Tanzania's property market remains less liquid than mature international markets. Properties may take longer to sell and require more flexible pricing strategies, particularly in secondary locations.
Political and economic risks include potential policy changes affecting foreign ownership, currency fluctuation impacts, and broader economic factors affecting property values. While Tanzania maintains political stability, investors should monitor policy developments affecting foreign investment.
These risks can be mitigated through thorough due diligence, local legal representation, proper title verification, and focusing on established locations with clear ownership structures and strong market demand.
Which property types offer the best short-term versus long-term potential?
Tanzania's diverse property market offers different opportunities depending on investment timeframe and risk tolerance.
Short-term potential leaders include city center apartments in Dar es Salaam and Dodoma, serviced apartment units targeting business travelers, and luxury holiday villas in established tourist districts like Zanzibar's Stone Town and beachfront areas. These properties benefit from immediate rental demand and rapid value appreciation in growth markets.
Long-term potential winners include townhouses in emerging growth corridors, mixed-use developments in planned communities, suburban land parcels along planned rail and port routes, and eco-tourism or lodge developments in areas with sustainable tourism potential. These properties may take longer to mature but offer substantial appreciation potential as infrastructure develops.
Commercial properties show strong performance in both timeframes, particularly in Dar es Salaam and Dodoma where business growth drives demand for office and retail space. Industrial properties near planned infrastructure also offer strong long-term potential.
Land investment provides the highest long-term appreciation potential but requires patience and local knowledge to identify areas benefiting from future development. Raw land in growth corridors can deliver exceptional returns over 5-10 year periods.
It's something we develop in our Tanzania property pack.
Where should you focus, what type of property makes sense, and what positioning gives the best outcome?
As of September 2025, Tanzania's property market offers clear opportunities for strategic investors willing to research locations and match property types to market demand.
Focus areas for immediate investment include emerging Dar es Salaam corridors like Kigamboni and Tegeta, which benefit from infrastructure development and urban expansion. Dodoma continues showing strong fundamentals as Tanzania's growing political center, while Mwanza offers commercial opportunities serving the country's interior regions.
Zanzibar remains premium for holiday rentals, particularly in Nungwi, Paje, and Stone Town areas where tourism demand supports high yields. Established Dar es Salaam neighborhoods like Masaki and Oyster Bay provide stable rental income and steady appreciation for conservative investors.
Property type selection should match location strengths: apartments work best for rental income in urban centers, land and townhouses target appreciation in growth corridors, and villas serve tourism markets in destination locations. Commercial properties perform well near infrastructure and business centers.
Optimal positioning requires focusing on infrastructure-linked locations, choosing properties with amenities attractive to target tenants (expatriates, tourists, or locals), and working with established developers offering clear titles and professional development standards. Success depends on thorough market research, legal compliance, and realistic expectations about timeframes and returns.
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.
Tanzania's property market in 2025 presents compelling opportunities for informed investors, with strong fundamentals supporting both rental income and capital appreciation across multiple market segments.
Success requires careful location selection, appropriate property type matching, and realistic expectations about timeframes, costs, and returns in this developing but dynamic African market.
Sources
- TheAfricanvestor - Tanzania House Prices
- TheAfricanvestor - Tanzania Price Forecasts
- Coldwell Banker - Tanzania Real Estate Investment 2025
- Coldwell Banker - Dar es Salaam Rental Yield 2025
- Vela Zanzibar - Property Investment Statistics
- RE/MAX Tanzania - Zanzibar Market Analysis 2025
- TheAfricanvestor - Tanzania Real Estate Market
- Statista - Tanzania Vacation Rentals Market
- Mrisho Consult - Land Ownership Costs
- Tax Natives - Tanzania Property Tax Changes