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 is booming, with tourist arrivals breaking records and prices climbing steadily across the island's best neighborhoods.
But not every area offers the same returns, and some locations that look attractive on paper come with hidden risks that can trap foreign buyers.
This guide breaks down exactly where to invest in Zanzibar in 2026, backed by real data on prices, yields, and demand, and we constantly update this blog post to keep it current.
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.
Fact-checked and reviewed by our local expert
Grace Makoye 🇹🇿
Manager of Operations, Zinza Real Estate
What's the Current Real Estate Market Situation by Area in Zanzibar?
Which areas in Zanzibar have the highest property prices per square meter in 2026?
As of early 2026, the three most expensive areas in Zanzibar are Stone Town's Shangani and Forodhani waterfront, followed by Kendwa beachfront on the northwest coast, and then Matemwe on the northeast coast, where prices can reach 8,000,000 to 18,000,000 Tanzanian shillings per square meter for premium properties.
In these most expensive neighborhoods of Zanzibar, you can expect to pay anywhere from 6,500,000 TZS per square meter for a renovated apartment to over 17,500,000 TZS per square meter for a beachfront villa with direct ocean access.
Each of these premium Zanzibar areas commands high prices for distinct reasons:
- Shangani and Forodhani in Stone Town: UNESCO heritage scarcity plus walkable access to restaurants and culture
- Kendwa beachfront: sunset-facing beach with no tidal issues and strong short-term rental liquidity
- Matemwe oceanfront: low-density privacy premium with fewer competing properties on the market
Which areas in Zanzibar have the most affordable property prices in 2026?
As of early 2026, the most affordable areas for property buyers in Zanzibar include the peri-urban belt around Zanzibar City (Mwera, Fuoni, Chukwani, and Bububu), followed by inland areas south of the tourist corridor (Tunguu and inland Makunduchi), and early-stage east coast pockets like Uroa inland.
In these more affordable Zanzibar neighborhoods, prices typically range from 1,200,000 to 3,500,000 Tanzanian shillings per square meter, making them accessible for budget-conscious investors or those seeking local tenant demand rather than tourist rentals.
However, each of these lower-priced Zanzibar areas comes with specific trade-offs you should understand before buying: Mwera and Fuoni offer good access to Zanzibar City jobs but have limited short-term rental potential, inland Tunguu and Makunduchi can be difficult to resell to foreign buyers without a clear use case, and Uroa inland pockets depend heavily on future road improvements to unlock their value.
You can also read our latest analysis regarding housing prices in Zanzibar.
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.
Which Areas in Zanzibar Offer the Best Rental Yields?
Which neighborhoods in Zanzibar have the highest gross rental yields in 2026?
As of early 2026, the Zanzibar neighborhoods delivering the highest gross rental yields include Paje village core (8% to 14%), Jambiani beachfront lanes (8% to 13%), Fumba Town and Dimani (7% to 11%), and Nungwi beach-adjacent pockets (7% to 12%).
Across Zanzibar as a whole, typical gross rental yields for investment properties range from about 5% in less liquid areas to 14% in well-managed short-term rental hotspots, with most properties falling in the 6% to 10% range depending on location and management quality.
These top-yielding Zanzibar neighborhoods outperform for specific reasons:
- Paje village core: strong "workation" demand with repeat visitors staying longer than typical tourists
- Jambiani beachfront: lower entry prices than Paje with growing kite-surf and dive tourism traffic
- Fumba Town and Dimani: visible rental supply with a growing resident community supporting stable occupancy
- Nungwi beach-adjacent: high volume demand but requires beach proximity and good reviews to compete
Finally, please note that we cover the rental yields in Zanzibar here.
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Which Areas in Zanzibar Are Best for Short-Term Vacation Rentals?
Which neighborhoods in Zanzibar perform best on Airbnb in 2026?
As of early 2026, the Zanzibar neighborhoods performing best on Airbnb are Stone Town's Shangani and Forodhani area, Paje village core, Kendwa beachfront, and Nungwi beach-adjacent streets, where occupancy rates can reach 70% to 90% in high season with nightly rates ranging from 150,000 to 500,000 Tanzanian shillings depending on property quality.
In these top-performing Zanzibar short-term rental neighborhoods, well-managed properties typically generate monthly revenues between 3,000,000 and 12,000,000 TZS during peak season, though shoulder and low seasons can see revenues drop by 30% to 50%.
Each of these Zanzibar Airbnb hotspots succeeds for different reasons:
- Shangani and Forodhani in Stone Town: heritage walkability attracts culture-focused travelers year-round
- Paje village core: kite-surfing scene plus cafes create a social hub for longer "workation" stays
- Kendwa beachfront: sunset beach with no tidal complaints delivers classic holiday demand
- Nungwi beach-adjacent: high volume but only properties with strong reviews and beach proximity thrive
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Zanzibar.
Which tourist areas in Zanzibar are becoming oversaturated with short-term rentals?
The three Zanzibar tourist areas showing the clearest signs of short-term rental oversaturation in early 2026 are Paje village core (especially standard studio and one-bedroom units), Nungwi's central tourism strip, and Stone Town's mid-market apartment segment.
In these oversaturated Zanzibar areas, the density of active short-term rental listings has grown significantly, with Paje alone seeing dozens of professionally managed units competing for the same pool of guests, and Stone Town hosting over 300 active listings across various platforms.
The clearest indicator of oversaturation in these Zanzibar neighborhoods is not just listing counts but the compression of nightly rates and occupancy for "average" properties, where units without standout features like pools, backup power, or exceptional design are seeing booking rates drop while better properties maintain their performance.
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 Areas in Zanzibar Are Best for Long-Term Rentals?
Which neighborhoods in Zanzibar have the strongest demand for long-term tenants?
The Zanzibar neighborhoods with the strongest long-term tenant demand in early 2026 are Fumba Town and Dimani, Zanzibar City's practical residential belt (Mwera, Fuoni, Chukwani, Bububu), Stone Town's edge near Ng'ambo and Michenzani, and the Paje corridor for hospitality workers.
In these high-demand Zanzibar long-term rental areas, well-maintained properties typically rent within two to four weeks of listing, with vacancy rates staying low because tenant pools include local professionals, NGO staff, hospitality management, and foreign residents seeking non-resort living.
Each of these Zanzibar neighborhoods attracts a distinct tenant profile:
- Fumba Town and Dimani: foreign residents and professionals seeking planned-community security and amenities
- Mwera, Fuoni, Chukwani, Bububu: local professional households with jobs in Zanzibar City or the airport
- Ng'ambo and Michenzani near Stone Town: NGO workers, project staff, and urban-lifestyle expats
- Paje corridor: hospitality industry managers and long-stay seasonal workers from nearby resorts
What makes these Zanzibar neighborhoods especially attractive to long-term tenants is reliable access to services and jobs: Fumba Town offers a self-contained community with shops and schools, the Zanzibar City belt provides proximity to employment centers, and Stone Town's edge combines urban convenience with cultural appeal.
Finally, please note that we provide a very granular rental analysis in our property pack about Zanzibar.
What are the average long-term monthly rents by neighborhood in Zanzibar in 2026?
As of early 2026, average long-term monthly rents in Zanzibar's main neighborhoods range from about 900,000 TZS for basic apartments in affordable areas to over 3,500,000 TZS for premium units in sought-after locations like Stone Town waterfront or Kendwa.
In the most affordable Zanzibar neighborhoods for long-term rentals, such as Mwera, Fuoni, and Chukwani, entry-level two to three bedroom houses typically rent for 900,000 to 2,200,000 TZS per month in good condition.
For mid-range apartments in Zanzibar areas like Fumba Town, Dimani, and Ng'ambo, expect to pay between 1,100,000 and 2,400,000 TZS monthly for a comfortable one to two bedroom unit with reliable utilities.
In Zanzibar's most expensive long-term rental neighborhoods, including Stone Town's Shangani waterfront, Kendwa, and Nungwi, high-end one to two bedroom apartments command 1,500,000 to 3,500,000 TZS per month, with beach proximity being the primary price driver.
You may want to check our latest analysis about the rents in Zanzibar here.
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Which Are the Up-and-Coming Areas to Invest in Zanzibar?
Which neighborhoods in Zanzibar are gentrifying and attracting new investors in 2026?
As of early 2026, the Zanzibar neighborhoods showing the clearest gentrification patterns and attracting new investors include Fumba Peninsula (especially Dimani shehia), Paje's "second line" area (10 to 20 minute walk from the beach), and Stone Town's edge streets toward Ng'ambo where restoration projects are spreading from the UNESCO core.
These gentrifying Zanzibar areas have experienced annual price appreciation of roughly 7% to 12% over recent years, with Fumba Peninsula benefiting from its master-planned development momentum and Paje second-line properties catching spillover demand from the increasingly expensive beachfront.
Which areas in Zanzibar have major infrastructure projects planned that will boost prices?
The Zanzibar areas most likely to see price boosts from infrastructure projects include Zanzibar City and Stone Town (benefiting from urban services upgrades), Fumba Peninsula (supported by Free Economic Zone planning), and areas along improved road corridors connecting the east coast beaches to the airport.
Specific infrastructure projects already underway or planned in Zanzibar include the World Bank-financed Zanzibar Urban Services Project (drainage, public realm, lighting, and sea wall improvements), the Fumba Free Economic Zone master-planned development, and the Pemba Airport modernization which will improve inter-island connectivity.
Historically in Zanzibar, areas that received significant infrastructure improvements have seen property values rise by 15% to 25% within two to three years of project completion, particularly where drainage and road access issues were resolved.
You'll find our latest property market analysis about Zanzibar here.
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.
Which Areas in Zanzibar Should I Avoid as a Property Investor?
Which neighborhoods in Zanzibar with lots of problems I should avoid and why?
Rather than naming specific "bad neighborhoods," the smarter approach in Zanzibar is to avoid certain risk patterns that can appear anywhere on the island, including flood-prone urban pockets, remote inland areas with no clear tenant story, and any property marketed with questionable legal documentation.
Each problem pattern in Zanzibar requires specific awareness:
- Low-lying Ng'ambo sections: poor drainage creates flooding risk during rainy season without building mitigation
- Deep inland beyond Paje or Jambiani: too far from tourist walk zones to generate rental demand
- Remote south inland beyond Makunduchi: resale trap for foreigners without local market connections
- Any property sold as "freehold for foreigners": legally impossible under Zanzibar's Land Tenure Act
For these problem areas in Zanzibar to become viable investments, you would need to see confirmed drainage infrastructure completion (for flood-prone zones), major road improvements with documented timelines (for remote areas), or complete restructuring of the legal documentation with proper registration (for paperwork issues).
Buying a property in the wrong neighborhood is one of the mistakes we cover in our list of risks and pitfalls people face when buying property in Zanzibar.
Which areas in Zanzibar have stagnant or declining property prices as of 2026?
As of early 2026, the Zanzibar areas showing the clearest signs of price stagnation include generic short-term rental stock in oversaturated tourist cores (standard studios in Paje and Nungwi), overpriced "almost beachfront" properties with poor access (some Jambiani and Uroa inland positions), and outdated Stone Town apartments that lack modern comfort upgrades.
While Zanzibar's overall market continues to appreciate, these stagnant areas have seen effective returns compress by 10% to 20% over the past two years as competition increased and newer, better-designed properties captured demand.
The underlying causes of stagnation vary by Zanzibar area:
- Standard studios in Paje core: oversupply of similar units competing on price rather than quality
- Nungwi central strip generic apartments: too many listings without differentiation chasing same guests
- Jambiani and Uroa "almost beachfront" plots: weak access roads and high maintenance erode value proposition
- Unrenovated Stone Town apartments: humidity, noise, and water pressure issues deter modern tenants
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Which Areas in Zanzibar Have the Best Long-Term Appreciation Potential?
Which areas in Zanzibar have historically appreciated the most recently?
The Zanzibar areas that have delivered the strongest appreciation over the past five to ten years include Stone Town's Shangani and Forodhani waterfront, Paje village core and near-beachfront, Nungwi prime beachfront, and Fumba Peninsula's master-planned zones.
Here are the approximate appreciation rates these top-performing Zanzibar areas have achieved:
- Stone Town Shangani and Forodhani: roughly 8% to 12% annually, driven by heritage scarcity
- Paje village core: approximately 10% to 15% annually during peak tourism recovery years
- Nungwi prime beachfront: around 10% to 15% annually for direct beach access properties
- Fumba Peninsula: about 7% to 10% annually with steady master-plan momentum
The main driver behind above-average appreciation in these Zanzibar areas is the combination of constrained supply (limited beachfront, UNESCO restrictions, or planned-zone boundaries) meeting rapidly growing international tourism demand, which has pushed visitor arrivals past 900,000 in 2025 toward the one million milestone.
By the way, you will find much more detailed trends and forecasts in our pack covering there is to know about buying a property in Zanzibar.
Which neighborhoods in Zanzibar are expected to see price growth in coming years?
The Zanzibar neighborhoods expected to see the strongest price growth through 2026 and beyond include Fumba Peninsula (Dimani and surrounding zones), Paje second-line walkable corridors, Stone Town edge streets benefiting from public realm improvements, and Kizimkazi on the south coast where dive tourism is growing.
Here are projected annual price growth rates for these high-potential Zanzibar neighborhoods:
- Fumba Peninsula: 7% to 10% annually as amenities scale and resale liquidity improves
- Paje second-line: 8% to 12% annually for differentiated properties riding area growth
- Stone Town edge near Ng'ambo: 6% to 9% annually following urban upgrade completion
- Kizimkazi: 8% to 12% annually as dive and dolphin tourism traffic increases
The single most important catalyst expected to drive future price growth in these Zanzibar neighborhoods is the continued surge in international tourism, with arrivals projected to exceed one million visitors in 2025 and government investment maintaining infrastructure improvements that make previously underserved areas more accessible and livable.
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 Do Locals and Expats Really Think About Different Areas in Zanzibar?
Which areas in Zanzibar do local residents consider the most desirable to live?
The areas that local Zanzibar residents consider most desirable to live in are generally the practical residential zones around Zanzibar City, including Mwera, Fuoni, Chukwani, and Bububu, plus urban-convenient areas like Ng'ambo near Stone Town.
Each of these locally-preferred Zanzibar areas offers distinct advantages:
- Mwera: affordable housing with good road access to Zanzibar City employment centers
- Fuoni: proximity to the airport corridor and growing commercial services
- Chukwani: established residential community with schools and local markets nearby
- Bububu: balance of suburban space with reasonable commute to Stone Town
- Ng'ambo: urban convenience and proximity to institutions and government offices
The typical residents in these locally-preferred Zanzibar areas are middle-class professional households, government employees, teachers, and business owners who prioritize daily convenience and family amenities over beach access or tourist nightlife.
Interestingly, local Zanzibar preferences often diverge significantly from what foreign investors target: locals value commute times, school quality, and market access, while foreigners focus on beach proximity, rental yields, and resort-style amenities.
Which neighborhoods in Zanzibar have the best reputation among expat communities?
The Zanzibar neighborhoods with the strongest reputation among expat communities include Paje village core and main-road corridor, Stone Town's Shangani and Forodhani area, and Fumba Town and Dimani.
Expats prefer these Zanzibar neighborhoods for specific lifestyle reasons:
- Paje: social density with cafes, activities, and a built-in community of like-minded residents
- Stone Town Shangani and Forodhani: cultural richness and urban walkability for those who enjoy city living
- Fumba Town and Dimani: planned-community predictability with reliable utilities and security
The expat profiles in these popular Zanzibar neighborhoods vary: Paje attracts younger digital nomads and active lifestyle seekers, Stone Town draws culture-focused professionals and creative types, while Fumba Town appeals to families and retirees who want convenience without the unpredictability of older neighborhoods.
Which areas in Zanzibar do locals say are overhyped by foreign buyers?
The three Zanzibar areas that locals most commonly say are overhyped by foreign buyers are Nungwi's central tourism strip, parts of Paje's beachfront, and some Kendwa beachfront properties.
Locals believe these Zanzibar areas are overvalued for specific reasons:
- Nungwi central strip: intense competition, noise, and power or water reliability issues below the surface
- Paje beachfront: high prices driven by tourist photos rather than practical livability year-round
- Kendwa beachfront: premium pricing for sunset views while infrastructure lags behind the price point
What foreign buyers typically see in these Zanzibar areas that locals do not value as highly is the "Instagram appeal" and short-term rental potential, while locals are more aware of daily inconveniences like generator dependence, water trucking, road conditions, and the seasonal nature of the tourist economy.
By the way, we've written a blog article detailing the experience of buying a property as a foreigner in Zanzibar.
Which areas in Zanzibar are considered boring or undesirable by residents?
The Zanzibar areas that residents commonly consider boring or undesirable include low-amenity inland pockets far from both Zanzibar City and the beach economy, such as remote areas south and inland from Makunduchi, parts of inland Pemba without tourism infrastructure, and some disconnected rural areas on Unguja's interior.
Residents find these Zanzibar areas unappealing for practical reasons:
- Remote inland south of Makunduchi: limited services, few job opportunities, and poor road access
- Inland Pemba without tourism links: isolated from both the capital and tourist spending
- Unguja interior rural pockets: agricultural focus with no clear path to residential development value
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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 Name | Why It's Authoritative | How We Used It |
|---|---|---|
| Zanzibar Land Tenure Act | It's the core statute governing how land rights work in Zanzibar. | We used it to explain why foreigners cannot hold freehold land. We also used it to frame what lease and right-of-occupancy structures practically mean for buyers. |
| Zanzibar Condominium Act | It's the primary law for condominium and unit-title ownership structures. | We used it to explain the common condo-plus-lease structure foreigners use. We used it to highlight why due diligence must confirm the exact legal form of any purchase. |
| Tanzania National Bureau of Statistics | It's the official government statistical agency for Tanzania including Zanzibar tourism data. | We used it to ground demand drivers behind short-term rentals with visitor profile data. We used it to keep rental yield estimates tied to tourism realities rather than anecdotes. |
| Zanzibar Office of Chief Government Statistician | OCGS is Zanzibar's official statistical authority publishing tourism and population data. | We used it to validate tourism growth claims with official monthly arrival figures. We used it to contextualize population and urbanization patterns affecting housing demand. |
| World Bank Zanzibar Urban Services Project | It's a primary-source project document from a major multilateral lender. | We used it to identify where public infrastructure investment has been targeted. We used it as evidence for why some urban areas became more investable after upgrades. |
| Bank of Tanzania | It's the central bank's official monetary policy and economic reporting. | We used it to set the early 2026 macro backdrop including inflation and credit conditions. We used it to interpret what limited mortgage availability means for cash-buyer dynamics. |
| Zanzibar Investment Promotion Authority | ZIPA is the government's one-stop investment authority under the Zanzibar Investment Act. | We used it to explain what "approved investment" means in practice. We used it to guide what paperwork typically sits behind foreign-friendly development projects. |
| Fumba Town Official Site | It's the primary source for one of Zanzibar's largest master-planned residential projects. | We used it to verify project scale, phasing, and positioning. We used it as a supply pipeline signal when judging competition and future resale market depth. |
| RE/MAX Tanzania | RE/MAX is a major brokerage brand consolidating transparent market offerings. | We used it as one of our transparent asking-price and rent snapshots to estimate yields. We used it to cross-check developer narratives with actual market numbers. |
| Knight Frank Africa Report | It's a major established real estate research publisher with consistent methodology. | We used it to triangulate what "prime" means in an Africa context. We used it to keep our Zanzibar yield estimates within plausible regional benchmark ranges. |
| AirDNA | AirDNA is a widely used short-term rental data provider tracking Airbnb and Vrbo performance. | We used it to frame how STR performance is typically measured including ADR and occupancy. We used it to structure our Airbnb neighborhood comparisons and saturation signals. |
| The Citizen Tanzania | It's a leading Tanzanian newspaper covering Zanzibar development and tourism news. | We used it to track infrastructure project announcements and tourism milestones. We used it to verify government investment claims and development timelines. |
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