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Where are the best places to invest in Zanzibar right now? Is Stone Town still the top pick, or are areas like Nungwi, Paje, and Jambiani gaining ground? What makes these locations attractive to both local and foreign investors?
We’re often asked these questions because we work directly with local property experts, real estate agents, and clients who invest across the island. Our firsthand experience in these markets gives us unique insights into where the real opportunities lie. To save everyone from asking privately, we’ve written this article to share our knowledge broadly.
Our goal is to highlight the hottest markets in Zanzibar and explain why they’re worth your attention in 2025.
If you have suggestions or want us to dive deeper into a specific area, let us know. You shoot an email, we answer within 24 hours.
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1) Matemwe is booming with rapid property appreciation due to luxury resorts and villas on its pristine beaches
Matemwe's property market is booming thanks to the rise of luxury resorts and villas along its stunning beaches.
European travelers, who love Zanzibar's charm, are a big part of this trend. Their interest has attracted major hotel brands like Anantara and Four Seasons, which are now investing in the area. This influx of international names is pushing property values even higher.
Tourism in Zanzibar is on the upswing, with over 638,444 visitors in 2023 and expectations of a 9% increase in 2024. This surge is driving up the demand for luxury stays, making Matemwe a hot spot for property appreciation.
Luxury resorts such as Matemwe Retreat and Zanzibar White Sand Luxury Villas & Spa are setting the stage for this transformation. Their presence is a testament to the growing appeal of high-end beachfront properties in the region.
As more travelers flock to Zanzibar, the need for upscale accommodations continues to rise. This trend is not just about tourism; it's about creating a premium real estate market that attracts global investors.
With its pristine beaches and luxury developments, Matemwe is quickly becoming a sought-after destination for those looking to invest in paradise. The combination of natural beauty and high-end living is making Matemwe a prime location for property buyers.
Sources: Easy Travel, 4Hoteliers, Daily News
2) Jambiani is attracting interest with high rental yields from its growing eco-tourism popularity
Jambiani is catching the eye of investors thanks to its impressive rental yields and eco-tourism appeal.
In this charming village, eco-friendly spots like the Ocean Boho House are buzzing with activity, showing a clear preference among travelers who care about the environment. Eco-conscious tourists are flocking to Jambiani, drawn by its commitment to sustainability and the unique experiences it offers.
Local businesses in Jambiani are all about going green, using renewable energy and cutting down on waste. This eco-friendly vibe is not just a trend; it's a lifestyle here. Jambiani's dedication to sustainability is making it a top choice for those who want to travel responsibly.
The property market in Zanzibar, including Jambiani, is on the rise, with expectations of a 20% annual growth over the next five years. This boom is fueled by the demand for eco-friendly stays, which are commanding higher daily rates. Investors are seeing rental yields of up to 12%, making Jambiani a hot spot for property investment.
With more eco-tourism businesses popping up, Jambiani is meeting the growing demand head-on. The village's eco-tourism initiatives are not just attracting visitors but also encouraging sustainable development in the area.
For those looking to invest in a place that values the environment and offers great returns, Jambiani is a promising choice. The combination of high rental yields and eco-tourism popularity makes it a standout destination.
Sources: Zanzipalms, Joagro Safaris, Booking.com
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) Michamvi is gaining interest for its secluded beaches and upscale resort developments
Michamvi is quickly becoming a hotspot for real estate investment.
In 2023, property prices in Michamvi saw a notable 6.67% increase, signaling a growing interest from potential buyers. This uptick is a promising sign for investors eyeing the area. The rise in prices reflects the increasing demand, making it a prime time to consider investing here.
Upscale resorts and hotels are sprouting up, adding to Michamvi's allure. The Azure development, for instance, boasts 54 luxury villas complete with private pools and stunning ocean views. Such high-end projects are magnets for investors seeking properties with strong appreciation potential. The presence of renowned luxury brands like Four Seasons and Le Meridien further underscores the area's appeal for upscale development.
Media attention has also shone a spotlight on Michamvi, enhancing its reputation as a prime investment destination. The Azure project caught the eye of Zanzibar’s Ministry of Tourism and Heritage, showcasing Michamvi’s unique attractions beyond the famous Stone Town. This kind of exposure helps put Michamvi on the map for potential investors.
Real estate firms are taking note of Michamvi’s potential, with some developers experiencing remarkable success with their luxury properties. The buzz around these developments is drawing more attention to the area, making it an exciting time for those looking to invest in Zanzibar.
With its secluded beaches and upscale resort developments, Michamvi is carving out a niche as a sought-after location for real estate investment. The combination of rising property prices, luxury developments, and increased media coverage makes it a compelling choice for investors.
Sources: Moving Countries Guide, Azure Developments, The Citizen, Haute Living
4) Makunduchi is attracting interest with its affordable land and development potential as infrastructure improves
Makunduchi is catching the eye of property buyers due to its affordable land prices in Zanzibar.
In recent years, specifically 2023 and 2024, land in Makunduchi has been a bargain compared to other areas. For instance, you could snag a plot for USD 480,000 for 4,385 square meters, while a similar piece in Michamvi would set you back USD 2 million for 17,902 square meters. This price difference is making Makunduchi a hot spot for savvy investors.
What's driving this interest? Well, the infrastructure is getting a major facelift. The Tunguu-Makunduchi road is being transformed into a modern highway, which will significantly reduce travel time. This upgrade, backed by the African Development Bank and the Zanzibar government, is set to wrap up by mid-2024, promising better connectivity and a boost in economic activity.
The Tanzanian government is also pouring money into road construction and maintenance, creating a favorable environment for residential development. This is part of a broader strategy to improve infrastructure and lure in more investment. As a result, the private sector is taking notice, with companies like Africa Luxury Properties listing several plots for sale in Makunduchi.
With these developments, Makunduchi is poised for growth, making it an attractive option for those looking to invest in Zanzibar's real estate market. The combination of affordable land prices and improving infrastructure is hard to resist for potential buyers.
As the area continues to develop, the potential for future growth is significant, especially as infrastructure improvements make it more accessible. This makes Makunduchi a promising choice for those looking to invest in a region with great potential for future development.
Sources: Jiji Tanzania, Deutsche Bank
5) Bwejuu is gaining attention for its eco-friendly developments and sustainable tourism projects
Bwejuu is catching the eye of investors for its eco-friendly development potential and sustainable tourism projects.
In recent years, Zanzibar's government has been serious about protecting its coastal resources. They've adopted an Integrated Coastal Area Management approach, which includes efforts in Bwejuu. This commitment has set the stage for eco-friendly projects to flourish.
Take the Kizimkazi Hiking Loop, for example. It's part of the Bahari Maisha Project and is a shining example of sustainable tourism in the area. This initiative focuses on community involvement and sustainability, fitting perfectly with Zanzibar’s Tourism Integrated Strategic Action Plan. It helps boost the local economy by linking small, locally owned businesses with tourists through digital platforms.
On top of that, the Zanzibar Biodiversity Finance Plan is offering investment incentives for those who are environmentally conscious. These incentives are designed to restore damaged forests and mangroves and encourage sustainable seaweed farming, making Bwejuu a hotspot for eco-friendly investments.
With these initiatives, Bwejuu is becoming a magnet for investors interested in sustainable tourism and eco-friendly projects. The area is ripe for development that respects the environment and supports the local community.
Investors are increasingly drawn to Bwejuu, not just for its natural beauty but for its potential to lead in sustainable tourism and eco-friendly development. The groundwork laid by the government and local projects is paving the way for a greener future.
Sources: CRC URI, APTA, BIOFIN
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6) Paje is booming with rising property values, attracting kite surfing enthusiasts and beachgoers
Paje is quickly becoming a favorite spot for kite surfing enthusiasts and beachgoers, causing property values to rise.
One of the main attractions is the affordable property prices compared to other hotspots like Mauritius and the Seychelles. Imagine snagging a luxury beachfront villa in Paje for just $495,000, a steal compared to similar destinations.
Over the past five years, property values in Paje have been on the up and up, with an average annual increase of 5-7%. This trend is expected to keep climbing, especially in prime areas, making it a smart investment choice.
The demand for properties is evident in the impressive rental yields of 8-12% in popular tourist spots. This is a clear sign of the area's growing appeal and potential for capital appreciation.
Paje's perfect kite surfing conditions are a magnet for tourists, thanks to top-notch facilities like Kite Centre Zanzibar. This influx of visitors is boosting real estate activity and sparking new beachfront developments.
With more tourists flocking in, the real estate market is buzzing, leading to increased transactions and development. This is further pushing up property values, making Paje a hot ticket for investors.
Sources: Properstar, Kite Centre Zanzibar, Johnnyafrica, ZanziPalms, Safanta Tours
7) Stone Town is gaining interest for its historical charm, attracting tourists and expatriates seeking unique living spaces
Stone Town's historical charm is driving a surge in property demand, attracting both tourists and expatriates.
In recent years, property prices in Stone Town have climbed significantly, reflecting the growing interest in its unique living spaces. This trend is especially evident in 2023 and 2024, as more people are drawn to the area's distinctive character. The allure of Stone Town isn't just about its architecture; it's about the vibrant culture and rich history that make it a captivating place to live.
Tourism is a major factor here. In 2023, over one million tourists visited Zanzibar, many enchanted by Stone Town's cultural and historical appeal. This influx has led to a noticeable increase in property transactions, as visitors often choose the charm of private villas and homes over traditional hotels. The demand for rental properties has soared, with occupancy rates reflecting this preference for more personal and unique accommodations.
International investors are also eyeing Stone Town, recognizing its potential. New residential projects are popping up, blending traditional architecture with modern comforts. These developments aim to preserve the historical essence of the area while meeting the needs of contemporary living. Real estate agencies specializing in Stone Town properties are thriving, facilitating investments and transactions for those eager to own a piece of this enchanting locale.
Stone Town's appeal is not just a passing trend; it's a growing movement. The combination of historical allure and modern living is a powerful draw for both tourists and expatriates. As more people discover the unique charm of Stone Town, the demand for property continues to rise, making it a hotspot for real estate investment.
For those considering a move or investment, Stone Town offers a unique opportunity to be part of a vibrant community steeped in history. The blend of old-world charm and modern amenities makes it an attractive option for anyone looking to experience the best of both worlds.
Sources: UNESCO, Daily News, Paddco, The Citizen
8) Fumba Town is gaining attention for its sustainable living and modern infrastructure, appealing to both expatriates and locals
Fumba Town is turning heads in the real estate world with its commitment to sustainable living and modern infrastructure.
In recent years, property values in Fumba Town have been climbing, thanks to its focus on eco-friendly practices and modern amenities. The town's use of solar energy and water recycling systems is a big draw for investors looking to support a greener future. This commitment to sustainability is not just a trend but a lifestyle choice that appeals to both expatriates and locals.
Fumba Town is making waves with its eco-friendly developments, using materials like engineered timber that are both sustainable and stylish. This innovative approach has caught the eye of international buyers and led to partnerships with global real estate agencies. As a result, the town is seeing a growing expatriate community, drawn by its unique blend of sustainability and modern living.
Globally, Fumba Town's vision of an ecological city model is gaining attention. Media outlets are highlighting its sustainability strategies, and the government is backing these efforts by supporting projects like the permanent African School of Economics campus. This aligns perfectly with Fumba Town's broader plan to become a model for sustainable urban development.
For those considering a move, Fumba Town offers a unique opportunity to be part of a community that values both the environment and modern conveniences. The town's focus on sustainability is not just about preserving nature but also about creating a vibrant, livable space for its residents.
With its modern infrastructure and eco-friendly initiatives, Fumba Town is not just a place to live but a place to thrive. The town's commitment to sustainability is evident in every aspect of its development, making it an attractive option for those looking to invest in a greener future.
Sources: Disfruta Zanzibar, Charter Cities Institute, Fumba Town
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.
9) Nungwi is booming with rising property prices, thanks to its vibrant nightlife and beautiful beaches attracting tourists year-round
Nungwi is a hot market with rising property prices, thanks to its vibrant nightlife and stunning beaches.
In recent years, property prices in Nungwi have been on the rise, with the average lease price increasing by 6.67% from 2022 to 2023. This trend highlights the area's growing appeal among investors and tourists alike. The surge in tourist arrivals has been a major factor, with Zanzibar experiencing a 62.1% increase in international visitors in January 2023 compared to the previous year.
Nungwi's lively atmosphere and breathtaking coastal views make it a top destination, drawing in tourists year-round. This influx has led to the development of over 50 hotels, from charming beach bungalows to luxurious five-star resorts. The high hotel occupancy rates, which hover around 80% annually, underscore Nungwi's popularity and ensure lucrative rental income for property owners.
The consistent demand for accommodations in Nungwi contributes to its investment potential. The development of luxury amenities and infrastructure, such as a new airport, further enhances Nungwi's attractiveness. These improvements promise continued growth in property values and rental yields, making it an appealing choice for investors.
For those considering buying property in the country, Nungwi offers a unique blend of natural beauty and vibrant culture. Its beaches are not just picturesque; they are a magnet for tourists, ensuring a steady stream of visitors and potential renters. The nightlife, with its lively bars and restaurants, adds to the area's charm, making it a desirable location for both short-term stays and long-term investments.
With its combination of stunning scenery, vibrant nightlife, and growing infrastructure, Nungwi is poised for continued growth. Investors looking for a promising market should consider the opportunities this area presents, as the demand for property is likely to remain strong.
Sources: Moving Countries Guide, Zanzibar Lux Properties, By Shivo
10) Chwaka is gaining interest for its eco-tourism potential and community projects, boosting land and property investments
Chwaka is becoming a hotspot for eco-tourism and community-based projects, thanks to the Jozani Chwaka Bay Conservation Area (JCBCA).
Since its designation as a National Park in 2004, the JCBCA has significantly boosted biodiversity and local livelihoods. This initiative empowers locals to manage their resources, promoting sustainable tourism. The area is now a model for how conservation can benefit both nature and people.
Eco-tourism in Zanzibar is on the rise, with a 15% increase in foreign tourists in October 2024, many from Europe. By December 2024, international visitors surged by 30.5% compared to the previous year. This growing interest in Zanzibar naturally extends to Chwaka, making it a prime spot for potential property buyers.
The government is actively fostering a peaceful and stable environment to attract tourists, recognizing tourism's role in economic growth. This supportive atmosphere is a key factor in the increased interest in eco-tourism projects in Chwaka.
JCBCA has also introduced alternative livelihoods like improved farming and mariculture, boosting cash incomes and access to capital for locals. These developments have not only improved residents' quality of life but also made Chwaka an appealing location for property investments.
With its blend of natural beauty and community-driven projects, Chwaka is drawing attention from those looking to invest in a place that offers both eco-friendly tourism and promising real estate opportunities.
Sources: Daily News, GEF IEO, The Citizen
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.