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
Zanzibar's property market in January 2026 is shaped by record-breaking tourism, stable interest rates, and a limited supply of quality homes in sought-after coastal areas.
In this article, we break down the current housing prices in Zanzibar, explore which neighborhoods are rising fastest, and share our forecasts for 2026 and beyond.
We update this blog post regularly to reflect the latest data and market shifts.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Zanzibar.
Insights
- Zanzibar welcomed over 743,000 international visitors by October 2025, already surpassing the entire 2024 total, which directly fuels short-term rental demand in coastal areas like Paje and Nungwi.
- The Bank of Tanzania held its benchmark rate at 5.75% in January 2026, keeping financing conditions stable for developers and buyers across Zanzibar.
- Prime beachfront villas in Zanzibar can command nightly rates of $600 to $1,000+, with high-season occupancy reaching 90%, translating to net rental yields of 10% to 15%.
- Only 600 to 800 new investment-grade residential units are expected to be delivered in Zanzibar before the end of 2026, ensuring supply remains tight against rising demand.
- Europeans account for roughly 67% of all tourists arriving in Zanzibar, with Italy, Germany, France, and the UK leading the source markets and driving premium property interest.
- Coastal land prices in areas like Kiwengwa and Matemwe have grown at an annual rate of 8% to 10% since 2019, outpacing most traditional investments in the region.
- Zanzibar's estimated housing gap stands at around 60,000 units, a structural undersupply that underpins long-term price support across both local and tourism-oriented segments.
- The new Class C11 residence permit, introduced in 2024, costs $550 for two years and covers a family of six, removing the old visa-run hassle for foreign property owners in Zanzibar.
- High-ticket foreign transactions (over $200,000) represented about 40% of Zanzibar property deals in 2024, up from 33% in 2023, signaling growing international investor confidence.
Fact-checked and reviewed by our local expert
Grace Makoye 🇹🇿
Manager of Operations, Zinza Real Estate
What are the current property price trends in Zanzibar as of 2026?
What is the average house price in Zanzibar as of 2026?
As of early 2026, the average residential property price in Zanzibar sits around 650 to 750 million Tanzanian shillings, which translates to roughly $250,000 to $290,000 or about 240,000 to 280,000 euros, blending urban homes, apartments, and some coastal stock together.
When you look at price per square meter, Zanzibar's island-wide average lands between $1,400 and $1,900 per square meter, though this varies dramatically depending on whether you are buying near Stone Town, along the popular east coast, or in the prime north coast beach zones.
For a realistic picture, roughly 80% of Zanzibar property purchases fall within a range of 150 million to 1.5 billion shillings, or about $60,000 to $580,000 (55,000 to 550,000 euros), covering everything from modest family homes in West Urban districts to well-finished villas near popular beaches.
How much have property prices increased in Zanzibar over the past 12 months?
Over the past 12 months, Zanzibar property prices have risen by an estimated 7% to 11% overall, with the strongest gains concentrated in tourism-driven coastal areas.
The range varies by property type and location: prime beachfront homes in places like Nungwi, Paje, and Jambiani saw increases of 10% to 16%, while mainstream urban housing in West Urban districts like Kisauni and Mbweni grew at a steadier 5% to 9%.
The single biggest driver of this price movement is the surge in tourist arrivals, with Zanzibar recording over 743,000 international visitors by October 2025, a figure that already exceeded the entire 2024 total and pushed short-term rental demand to new highs.
Which neighborhoods have the fastest rising property prices in Zanzibar as of 2026?
As of early 2026, the three neighborhoods with the fastest rising property prices in Zanzibar are Nungwi on the north coast, Paje on the southeast coast, and Fumba on the southwest coast near Stone Town.
Nungwi and Paje have both seen annual price growth in the range of 12% to 16%, driven by their reputation as premium beach destinations, while Fumba has climbed around 10% to 14% thanks to its master-planned development appeal and proximity to the urban center.
The main demand driver behind these fast-rising areas is the combination of limited beachfront supply and strong short-term rental economics, where tourism cash flows justify higher purchase prices and attract both lifestyle buyers and yield-focused investors.
By the way, you will find much more detailed price ranges across neighborhoods in our property pack covering the real estate market in Zanzibar.
We have made this infographic to give you a quick and clear snapshot of the property market in Tanzania. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which property types are increasing faster in value in Zanzibar as of 2026?
As of early 2026, beachfront and near-beach villas lead Zanzibar's appreciation ranking, followed by short-let-friendly apartments in Stone Town, then well-documented family houses in West Urban, with undocumented or poorly-accessed properties trailing at the bottom.
The top-performing property type, turnkey beachfront villas in areas like Paje and Matemwe, is appreciating at roughly 12% to 16% annually, outpacing all other residential categories on the island.
The main reason villas outperform is their direct connection to tourism revenue: a well-managed villa can generate $600 to $1,000+ per night in high season with occupancy rates near 90%, making the income potential far higher than apartments or standalone urban houses.
Finally, if you're interested in a specific property type, you will find our latest analyses here:
- How much do properties cost in Zanzibar?
- How much should you pay for a house in Zanzibar?
- How much should you pay for a villa in Zanzibar?
- How much should you pay for lands in Zanzibar?
What is driving property prices up or down in Zanzibar as of 2026?
As of early 2026, the top three factors driving Zanzibar property prices are record-breaking tourism arrivals, stable financing conditions from the Bank of Tanzania, and ongoing infrastructure improvements under government development plans.
The strongest upward pressure comes from tourism growth: Zanzibar is on track to welcome close to 1 million visitors in 2025, and this surge directly translates into higher short-term rental demand, better occupancy rates, and stronger cash flows that justify rising property values.
If you want to understand these factors at a deeper level, you can read our latest property market analysis about Zanzibar here.
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What is the property price forecast for Zanzibar in 2026?
How much are property prices expected to increase in Zanzibar in 2026?
As of early 2026, Zanzibar property prices are expected to increase by 6% to 10% over the course of the year, with prime coastal areas likely to outperform and urban mainstream areas rising more modestly.
Forecasts from different analysts range from a conservative 5% to 6% in a scenario where tourism softens, up to 12% to 13% in a bull case where new flight routes and sustained European demand accelerate the market.
The main assumption underlying most forecasts is that tourist arrivals will continue growing at mid-single-digit rates while the Bank of Tanzania keeps its policy rate stable around 5.75%, avoiding any sharp credit tightening.
We go deeper and try to understand how solid are these forecasts in our pack covering the property market in Zanzibar.
Which neighborhoods will see the highest price growth in Zanzibar in 2026?
As of early 2026, the neighborhoods expected to see the highest price growth in Zanzibar are Paje, Jambiani, and Bwejuu on the east coast, along with Nungwi and Kendwa on the north coast, and Fumba on the southwest.
These top neighborhoods are projected to see price growth of 10% to 15% over 2026, benefiting from a combination of tourism demand, beachfront scarcity, and ongoing infrastructure improvements.
The primary catalyst is the continued expansion of direct international flights, which has made Zanzibar more accessible to European and Gulf travelers who tend to favor these specific beach destinations.
One emerging neighborhood that could surprise with higher-than-expected growth is Matemwe on the northeast coast, where new boutique developments and improving road access are attracting buyers looking for quieter, less crowded alternatives to Nungwi.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Zanzibar.
What property types will appreciate the most in Zanzibar in 2026?
As of early 2026, near-beach villas with turnkey finishes and reliable utilities are expected to appreciate the most in Zanzibar, followed by well-located apartments in Stone Town and documented family homes in West Urban districts.
The projected appreciation for top-performing beachfront villas is 10% to 15% over 2026, driven by their ability to generate strong rental income during peak tourist seasons.
The main demand trend is the shift toward premium, low-density travel experiences: international visitors increasingly want private villas with pools and direct beach access rather than hotel rooms, and this preference is pushing villa prices higher.
The property type expected to underperform in 2026 is undocumented or poorly-accessed housing in secondary urban areas, where limited rental appeal and buyer uncertainty about title status keep demand and prices subdued.
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 will interest rates affect property prices in Zanzibar in 2026?
As of early 2026, the stable interest rate environment is supporting Zanzibar property prices by keeping developer financing predictable and avoiding sudden affordability shocks for local buyers.
The Bank of Tanzania held its benchmark rate at 5.75% in January 2026, the second consecutive hold, and most analysts expect mortgage rates to remain relatively stable through the year given low inflation of around 3.4%.
A 1% increase in interest rates would typically reduce purchasing power by roughly 8% to 10% for leveraged buyers in Zanzibar, which could slow price growth in the mid-market urban segment while leaving cash-heavy foreign buyers in prime coastal areas less affected.
You can also read our latest update about mortgage and interest rates in Tanzania.
What are the biggest risks for property prices in Zanzibar in 2026?
As of early 2026, the three biggest risks for Zanzibar property prices are a tourism slowdown due to global economic weakness, overbuilding in select hotspots creating localized oversupply, and documentation or title issues reducing liquidity for certain properties.
The risk with the highest probability of materializing is tourism volatility: if European economies weaken or airline capacity shifts away from Zanzibar, the short-term rental market could soften quickly, putting pressure on prices in tourism-dependent areas like Nungwi and Paje.
We actually cover all these risks and their likelihoods in our pack about the real estate market in Zanzibar.
Is it a good time to buy a rental property in Zanzibar in 2026?
As of early 2026, it is generally a good time to buy a rental property in Zanzibar if you target the right micro-market and underwrite conservatively, given the supportive combination of record tourism, stable rates, and constrained supply.
The strongest argument for buying now is that Zanzibar is approaching 1 million annual visitors while only 600 to 800 new investment-grade units will come online before the end of 2026, meaning demand continues to outstrip supply in prime rental areas.
The strongest argument for waiting is that some beachfront segments, particularly in Nungwi and Paje, may be priced for perfect execution, and if tourism growth slows or new supply arrives faster than expected, buyers who paid peak prices could see flatter returns.
If you want to know our latest analysis (results may differ from what you just read), you can read our assessment on whether now is a good time to buy a property in Zanzibar.
You'll also find a dedicated document about this specific question in our pack about real estate in Zanzibar.
Buying real estate in Zanzibar can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
Where will property prices be in 5 years in Zanzibar?
What is the 5-year property price forecast for Zanzibar as of 2026?
As of early 2026, cumulative property price growth in Zanzibar over the next 5 years is expected to land between 35% and 55%, assuming steady tourism expansion and no major economic shocks.
The range of 5-year forecasts runs from a conservative 25% to 35% in a scenario where tourism flatlines and rates rise, up to an optimistic 55% to 70% if new flight routes, a formal Golden Visa program, and sustained global travel demand all materialize.
This translates to a projected average annual appreciation rate of roughly 6% to 9% over the next five years, which would outpace inflation and most traditional savings options in the region.
The key assumption most forecasters rely on is that Zanzibar's structural undersupply of an estimated 60,000 housing units will persist, keeping demand consistently ahead of new construction.
Which areas in Zanzibar will have the best price growth over the next 5 years?
The top three areas expected to deliver the best price growth in Zanzibar over the next 5 years are the Paje-Jambiani corridor on the southeast coast, Fumba on the southwest with its master-planned development appeal, and the Kisauni-Mbweni-Bububu urban expansion zone near Stone Town.
These top-performing areas are projected to see cumulative 5-year price growth of 50% to 70%, driven by a combination of tourism demand, infrastructure upgrades, and constrained beachfront supply.
This differs slightly from our shorter 2026 forecast because the 5-year view gives more weight to urban upgrading projects and emerging "second-ring" areas like Bububu, where today's affordability could translate into stronger percentage gains as infrastructure catches up.
The currently undervalued area with the best potential for outperformance over 5 years is Matemwe on the northeast coast, where lower entry prices, improving access, and growing interest from boutique developers could produce returns above the island average.
What property type will give the best return in Zanzibar over 5 years as of 2026?
As of early 2026, near-beach villas in proven rental markets like Paje, Jambiani, and Matemwe are expected to deliver the best total return over 5 years in Zanzibar, combining strong appreciation with high rental yields.
The projected 5-year total return for this top-performing property type is roughly 80% to 120%, blending estimated 45% to 65% capital appreciation with cumulative rental income at net yields of 10% to 15% annually.
The main structural trend favoring villas is the ongoing shift in global travel preferences toward private, low-density accommodation, which positions well-managed Zanzibar villas to capture premium nightly rates and strong occupancy.
For investors seeking the best balance of return and lower risk over 5 years, well-documented family houses in West Urban districts like Kisauni offer steadier appreciation of around 30% to 45% with less exposure to tourism volatility.
How will new infrastructure projects affect property prices in Zanzibar over 5 years?
The top three major infrastructure projects expected to impact Zanzibar property prices over the next 5 years are the BIG-Z urban upgrading program targeting areas like Tomondo and Sebleni-Kwa Wazee, airport expansion at Abeid Amani Karume International Airport, and road improvements connecting Stone Town to east coast beaches.
Properties near completed infrastructure projects in Zanzibar typically command a price premium of 15% to 25% compared to similar homes in areas without recent upgrades, as better roads, drainage, and utilities directly improve livability and rental appeal.
The neighborhoods that will benefit most from these infrastructure developments are Fumba and nearby Mbweni from improved road access, Tomondo and Meya-Magomeni from urban upgrading, and the Paje-Jambiani corridor from better connectivity to Stone Town.
How will population growth and other factors impact property values in Zanzibar in 5 years?
Zanzibar's population is projected to grow at roughly 2.5% to 3% annually over the next 5 years, adding sustained pressure on housing demand particularly in the urbanized West Urban district where most residents live and work.
The demographic shift with the strongest influence on property demand in Zanzibar is household formation among young adults aged 25 to 40, who are increasingly seeking independent housing as incomes rise and traditional extended-family living patterns evolve.
Migration patterns will significantly affect Zanzibar property values over 5 years, with continued inflows of mainland Tanzanians seeking economic opportunities on the islands and a growing community of international expats and retirees attracted by the lifestyle and new residency permits.
The property types and areas that will benefit most from these demographic trends are affordable apartments and family houses in the Kisauni-Mbweni-Bububu urban expansion zone for local demand, and premium coastal homes in Paje and Nungwi for international lifestyle buyers.
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.
What is the 10 year property price outlook in Zanzibar?
What is the 10-year property price prediction for Zanzibar as of 2026?
As of early 2026, cumulative property price growth in Zanzibar over the next 10 years is expected to reach 90% to 140% for the island overall, with prime coastal areas potentially seeing gains of 110% to 170%.
The range of 10-year forecasts spans from a conservative 70% to 90% in a scenario of slower tourism growth and rising rates, up to an optimistic 150% to 180% if Zanzibar successfully positions itself as a leading Indian Ocean destination with expanded flight connectivity.
This translates to a projected average annual appreciation rate of roughly 7% to 9% over the decade, which would make Zanzibar property one of the better-performing real asset classes in East Africa.
The biggest uncertainty factor in making 10-year predictions for Zanzibar is climate and coastal resilience: rising sea levels, erosion, and flooding could materially affect beachfront property values, and how the island adapts to these challenges will shape long-term outcomes.
What long-term economic factors will shape property prices in Zanzibar?
The top three long-term economic factors that will shape Zanzibar property prices over the next decade are tourism competitiveness including flight connectivity and destination branding, inflation and construction cost trends that set replacement value floors, and the evolution of mortgage availability and credit depth.
The single factor with the most positive long-term impact on Zanzibar property values is sustained tourism growth: if the island can maintain its trajectory toward 1.5 million annual visitors by 2030, the rental income potential will continue to justify rising prices across coastal and heritage areas.
The greatest structural risk to long-term property values in Zanzibar is climate exposure: coastal erosion, flooding, and the potential need for expensive adaptation measures could cap appreciation in vulnerable beachfront locations and shift buyer preferences inland over time.
You'll also find a much more detailed analysis in our pack about real estate in Zanzibar.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Zanzibar, we always rely on the strongest methodology we can … and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| Office of the Chief Government Statistician (OCGS) Zanzibar | Zanzibar's official statistics agency providing government-verified data. | We used it for GDP growth, inflation, and tourism arrivals to establish the demand backdrop behind housing prices. |
| OCGS Tourism Statistical Release (Nov 2025) | Official bulletin with counted visitor arrivals from the government. | We used it to quantify the tourism pulse feeding short-let demand in beach areas and translated that into price pressure. |
| Zanzibar Statistical Information System (ZANSIS) | OCGS' official data portal for time series and publications. | We used it to cross-check key macro indicators and ensure our analysis matches official trends. |
| National Bureau of Statistics (NBS) Tanzania | Tanzania's national statistics agency with comprehensive economic data. | We used it for national CPI and broader macro context that affects Zanzibar via shared currency and inflation. |
| 2022 Population and Housing Census | Official census-based report from NBS and OCGS jointly. | We used it for population and household fundamentals that ground long-term housing demand forecasts. |
| Bank of Tanzania (BoT) | Tanzania's central bank setting monetary policy and interest rates. | We used it to anchor interest rate expectations and credit conditions affecting mortgages and developer financing. |
| BoT Economic Bulletin (Q2 2025) | Official quarterly statistical publication from the central bank. | We used it for central bank rate context and credit liquidity commentary to assess financing conditions. |
| IMF Article IV Staff Report (2025) | IMF's in-depth, standardized macro assessment for Tanzania. | We used it for macro risks and opportunities that spill over to Zanzibar and to keep our risk section grounded. |
| World Bank Tanzania Economic Update | World Bank's flagship periodic economic outlook for Tanzania. | We used it to triangulate growth drivers and downside risks as an outside check on BoT and IMF projections. |
| Zanzibar Investment Promotion Authority (ZIPA) | Official government investment promotion body with project data. | We used it to support the investment pipeline story and explain why some areas see faster high-end development. |
| Zanzibar Business and Property Registration Agency (BPRA) | Government body responsible for business and property registration. | We used it to frame market formalization issues that affect liquidity and buyer confidence in documented properties. |
| Zanzibar Development Plan (ZADEP) 2021-2026 | Zanzibar's official medium-term development plan setting government priorities. | We used it to identify policy priorities and infrastructure plans that shift housing demand in specific areas. |
| BIG-Z Urban Upgrading Project | Zanzibar Ministry of Finance project document with named locations. | We used it to pinpoint specific upgrading areas likely to see improved livability and rising property values. |
| Properstar | Public listing aggregator showing transparent asking prices across agents. | We used it as a pricing reality check from live comparable listings where no official price index exists. |
| ZNZApartments | Zanzibar-focused portal with location-tagged rental listings. | We used it to sanity-check rent levels and infer which zones can justify higher purchase prices based on yield logic. |
| TanzaniaInvest | Business and investment news platform covering Tanzania's economy. | We used it to track economic policy updates, inflation data, and central bank decisions affecting the property market. |
| Trading Economics | Financial data platform aggregating official economic indicators. | We used it to verify current interest rates and inflation figures from the Bank of Tanzania. |
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If you want to go deeper, you can read the following: