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What do the latest numbers reveal about Zanzibar’s real estate market? Are property prices on the rise, or are they stabilizing? Which areas 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 Zanzibar, 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) By 2025, about 30% of new residential developments in Zanzibar will be eco-friendly
In 2025, approximately 30% of new residential developments in Zanzibar are eco-friendly, reflecting a shift towards sustainable living.
This change has been fueled by a growing awareness among people who want homes that align with their environmental values. The Tanzanian government has been instrumental in this shift, actively promoting sustainable tourism and development across the region. By establishing criteria for conservation excellence, Tanzania, including Zanzibar, has emerged as a top eco-tourism destination.
Infrastructure improvements, such as better roads and utilities, have made Zanzibar more appealing for eco-friendly projects. Significant investments have enhanced accessibility, encouraging more sustainable developments. A prime example is Fumba Town, which has become a model for sustainable living by incorporating solar power and rainwater harvesting.
Fumba Town's success has inspired other projects to follow suit, showcasing the benefits of eco-friendly construction. Developments like these highlight the practical advantages of sustainable living, attracting more interest and investment in the region.
As more people seek environmentally conscious living options, the demand for eco-friendly homes in Zanzibar continues to rise. This trend is reshaping the real estate landscape, with developers increasingly focusing on sustainability to meet consumer expectations.
Sources: The African Investor, Zanzi Palms, Fumba Town
2) Beachfront property prices in Zanzibar have risen by 15% over the past year
The average price of beachfront properties in Zanzibar has increased by 15% over the past year.
Several factors are fueling this trend. The real estate market in Zanzibar is on the rise, thanks to tourism growth, economic development, and increased foreign investment. These elements are key drivers behind the climbing property prices.
Beachfront properties are particularly sought after. Their prime locations and attractive rental yields, which range from 6% to 8%, make them hot commodities. High-end properties can even yield up to 12%, naturally pushing prices higher.
The booming tourism industry in Zanzibar plays a crucial role. As more tourists flock to the island, the demand for luxury holiday homes rises, which in turn drives up property prices.
Investors are keen on these properties not just for personal use but also for their potential as lucrative rental investments. The combination of stunning views and profitable returns makes them irresistible.
Sources: Zanzibar Lux Properties, Zanzi Palms
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.
3) Foreign investors buying property in Zanzibar increased by 20% in 2024
In 2023, Zanzibar experienced a 15% increase in Foreign Direct Investment (FDI), largely fueled by the tourism and real estate sectors.
This surge in investment set the stage for a promising 2024, where the number of foreign investors purchasing property in Zanzibar rose by 20%. The property market was projected to grow by 20% annually over the next five years, driven by increasing demand and the potential for high returns.
The Zanzibar Investment Promotion Authority (ZIPA) played a crucial role by introducing incentives that made it easier for international investors to acquire real estate. These incentives were a key factor in the increased number of foreign investors buying property in 2024.
In popular tourist areas, rental yields could reach up to 12%, with occupancy rates soaring to 75% during peak season. This made Zanzibar an attractive destination for property investment, offering lucrative opportunities for those looking to enter the market.
With such promising figures, it's no wonder that foreign investors are increasingly eyeing Zanzibar as a prime location for property investment. The combination of high rental yields and strong occupancy rates underscores the island's potential for substantial returns.
Sources: Zanzipalms, Paddco, Zanzipalms
4) In 2024, 35% of properties in Zanzibar were sold to first-time buyers
In 2024, 35% of properties in Zanzibar were sold to first-time buyers.
Zanzibar's real estate market has been on a remarkable upswing over the past decade. This surge is largely due to booming tourism, strategic government initiatives, and rising foreign investment. The residential sector, in particular, has become a hot spot, attracting a growing middle class, expatriates, and urban dwellers. These dynamics have likely made the market more enticing for first-time buyers.
The Zanzibar government has played a pivotal role by investing $500 million in infrastructure. This includes enhancements to roads, utilities, and airports, which have likely boosted property values and appeal. Such improvements, coupled with a thriving market, may have drawn more first-time buyers in 2024.
Tourism, a major player in Zanzibar's economy, also indirectly impacts the real estate scene. The demand for luxury holiday homes during peak tourist seasons can create a ripple effect. This makes residential properties more attractive to first-time buyers seeking investment opportunities or a new home.
With these factors in play, it's no surprise that first-time buyers found Zanzibar's real estate market appealing. The combination of a growing economy, improved infrastructure, and a vibrant tourism industry has created a fertile ground for new buyers.
Sources: Zanzipalms, Zanzibar Lux Properties, Zanzipalms
5) Properties in Zanzibar appreciate at an average rate of 5% annually as of 2025
The average appreciation rate for properties in Zanzibar is 5% annually as of 2025.
This growth is largely fueled by Zanzibar's booming tourism industry. As more tourists flock to the island, the demand for accommodations and services rises, naturally boosting property values. The government is also playing a significant role by investing $500 million in infrastructure, including road improvements, utilities, and airport upgrades, making the island more accessible and appealing to both tourists and investors.
In prime locations like Stone Town and Jambiani, property values are climbing even faster. These areas are particularly desirable, which further drives up property values and contributes to the overall appreciation rate. The charm and historical significance of Stone Town, combined with the stunning beaches of Jambiani, make these spots highly sought after.
Investors are taking note of these trends, recognizing the potential for significant returns. The combination of a thriving tourism sector and substantial government investment creates a fertile ground for property appreciation. This makes Zanzibar an attractive option for those looking to invest in real estate.
Moreover, the island's natural beauty and cultural richness add to its allure, drawing in both tourists and potential property buyers. The unique blend of history, culture, and modern development makes Zanzibar a compelling destination for investment.
Source: Zanzipalms
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6) A three-bedroom house in Zanzibar will average $150,000 in 2025
The average cost of a three-bedroom house in Zanzibar is $150,000 in 2025.
In recent years, particularly 2023 and 2024, Zanzibar's real estate market has been buzzing with activity. The island's charm has attracted a strong influx of tourists, which in turn has influenced the property market. This surge in visitors led to changes in residence permits, making it easier for foreign investors to acquire long-term leases and enjoy tax-free residency. These changes have significantly boosted the market.
Developers have been busy with exciting projects, especially along the waterfront. These luxury mixed-use developments offer a variety of property options, from high-end to more budget-friendly homes. This variety helps explain why the average price for a three-bedroom house is $150,000.
For those considering a move or investment, Zanzibar offers a unique blend of culture and opportunity. The island's real estate market is not just about luxury; it provides a range of options that cater to different budgets and preferences. This diversity in housing options is a key factor in the current pricing trends.
Moreover, the island's strategic location and natural beauty make it an attractive destination for both tourists and investors. The combination of these factors has created a dynamic real estate market, where prices are influenced by both local and international demand.
Sources: Tanzania Invest, Hata, Zanzi Palms
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.