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Zanzibar's property market offers strong potential for investors seeking both rental income and capital appreciation in East Africa's tourism hotspot. Property prices have grown steadily at 5-7% annually over the past five years, with prime beachfront areas seeing double-digit gains as tourism doubled since 2019.
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.
Zanzibar property prices range from $20/m² for inland plots to $120/m² for prime beachfront land, with apartments averaging $54,000-$58,000 for new units.
Short-term rental yields of 12-15% remain achievable for well-located properties, while long-term leases offer 8-10% returns in established areas.
| Area | Property Type | Price Range (USD) | Rental Yield | Growth Potential |
|---|---|---|---|---|
| Stone Town | Apartments | $1,000-1,500/m² | 8-10% | Medium-High |
| Nungwi/Kendwa | Beachfront Villas | $300,000-1M+ | 12-15% | Very High |
| Jambiani Beach | Beach Plots | $45-60/m² | 10-12% | High |
| Urban Residential | Houses | $150,000 avg | 7-9% | Medium |
| Fumba Town | New Condos | $80,000-200,000 | 8-10% | High |
| Paje | Tourist Villas | $200,000-600,000 | 12-15% | High |
Fact-checked and reviewed by our local expert
Grace Makoye 🇹🇿
Manager of Operations, Zinza Real Estate
What's the average property price right now in Zanzibar, broken down by location and property type?
As of September 2025, Zanzibar property prices vary dramatically based on location and property type, with beachfront areas commanding premium rates.
Stone Town apartments average $1,000-1,500 per square meter, with luxury properties reaching $2,400-2,800 per square meter. This historic area remains popular due to its UNESCO World Heritage status and cultural significance.
Beachfront locations like Nungwi and Kendwa see the highest prices, with beachfront plots selling for $100-120 per square meter. A typical 40,500 square meter beachfront plot costs around $4.7 million, while villas in these areas start at $300,000 and can exceed $1 million for premium properties.
Mid-tier beach locations like Jambiani offer more affordable options at $45-60 per square meter for plots, with villas ranging from $120,000 to $400,000. For budget-conscious buyers, inland and urban residential areas offer plots at $20-35 per square meter, with a typical three-bedroom house averaging $150,000.
New apartment developments provide entry-level opportunities, with 60 square meter units typically costing $54,000-$58,000, making them accessible for first-time investors in the Zanzibar market.
How much has the Zanzibar property market grown in the past 5 years, and what's the short-term trend?
The Zanzibar property market has experienced consistent growth over the past five years, with annual price increases averaging 5-7% across all property types.
Beachfront and luxury segments have significantly outperformed this average, with some areas seeing annual appreciation rates of up to 15%. Since 2020, buyers in prime locations have realized aggregate gains of 25-40%, driven primarily by Zanzibar's tourism boom that has doubled visitor numbers since 2019.
The coastal property market has been the star performer, with areas like Nungwi, Kendwa, and Paje experiencing double-digit annual growth rates. This growth reflects increasing international recognition of Zanzibar as a premium Indian Ocean destination.
However, the short-term trend shows moderate cooling as supply begins catching up with demand, particularly in the short-term rental market. The Airbnb segment is experiencing some saturation, leading to increased competition and seasonal volatility.
Despite this cooling, market fundamentals remain strong for medium and long-term appreciation, especially in coastal areas where infrastructure improvements continue to drive development and accessibility.
What are the expected rental returns in different Zanzibar areas today, both short-term and long-term?
Zanzibar's rental market offers attractive returns for both short-term and long-term strategies, with yields varying significantly by location and property type.
Short-term rental properties through Airbnb typically gross $7,000-$11,800 annually, with average daily rates ranging from $50-$144 per night. Top-tier beachfront villas can command up to $300 per night during peak seasons, though median occupancy rates hover around 25-40% with peaks in July-August and December-January.
Well-located beachfront properties and urban apartments in tourist hotspots still achieve yields of 12-15%, making them attractive for investors focused on maximizing rental income. The key is location proximity to beaches, restaurants, and tourist attractions.
Long-term lease properties offer more stable but lower returns, with modern apartments yielding 8-10%, family homes generating 7-9%, and in-demand villas achieving over 10% during high seasons due to strong expat demand.
It's something we develop in our Tanzania property pack.
How quickly are properties typically resold in Zanzibar, and what's the average value increase by area?
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What are the most in-demand property types in Zanzibar right now, and who's buying them?
The Zanzibar property market is currently dominated by demand for beachfront villas, serviced apartments, and condominiums in Stone Town, along with plots in new resort developments.
Beachfront villas represent the most sought-after property type, attracting buyers seeking luxury vacation homes or high-yield rental investments. These properties offer the strongest appreciation potential and rental income opportunities.
Serviced apartments and modern condominiums in Stone Town appeal to investors targeting the growing expat community and business travelers who prefer hotel-style amenities with residential comfort.
The primary buyer demographic consists of foreign investors, expatriates from Europe and the Middle East, digital nomads seeking tropical bases, and members of the Zanzibar diaspora investing in their homeland. Gated communities, eco-friendly developments, and mixed-use projects are particularly attractive to these buyer groups.
Investment plots in emerging resort areas also see strong demand from developers and long-term investors betting on infrastructure improvements and tourism growth in currently underdeveloped coastal areas.
Which areas show the strongest growth potential for the medium term, and why?
Several Zanzibar locations demonstrate exceptional medium-term growth potential based on infrastructure development, tourism expansion, and government investment incentives.
Nungwi, Kendwa, and Paje continue leading growth due to their established tourism infrastructure, pristine beaches, and ongoing resort developments. These areas benefit from completed road improvements and proximity to the upgraded international airport.
Jambiani represents an emerging hotspot with significant upside potential, offering lower entry costs while benefiting from spillover demand as more established areas reach capacity. The area's authentic fishing village character appeals to tourists seeking cultural experiences.
Fumba Town stands out as a planned development with modern infrastructure, offering a Western-style living environment that attracts expatriates and affluent locals. Its master-planned approach ensures consistent property values and community amenities.
Kizimkazi and Stone Town's outskirts benefit from government initiatives promoting Free Economic Zones, which attract foreign and corporate investment while maintaining proximity to the historic city center and its UNESCO World Heritage appeal.
What infrastructure projects are planned for the next 3-5 years that could impact property values?
Zanzibar's infrastructure development pipeline includes several major projects that will significantly impact property values across different areas of the island.
The international airport upgrade has been completed, providing enhanced connectivity that directly benefits tourism-dependent property markets. This improved access makes Zanzibar more attractive to international visitors and investors alike.
Road network expansions are ongoing, with new connections linking previously remote areas to main tourist zones. These improvements reduce travel times and make previously inaccessible areas viable for development and investment.
Major utility infrastructure projects include new water treatment facilities and expanded power distribution networks to resort areas. These essential services are crucial for supporting new residential and commercial developments.
Free Economic Zone developments represent the most significant long-term growth driver, attracting foreign corporate investment and creating employment opportunities that support residential demand. Several new mixed-use complexes and marina projects are in the planning stages, promising to transform currently underdeveloped coastal areas into integrated resort communities.
How do purchase costs, taxes, and maintenance fees vary across property types and locations in Zanzibar?
Zanzibar property ownership involves several cost categories that vary significantly depending on property type, location, and development level.
The largest upfront cost is stamp duty at 5% of the purchase price, which applies to all property transactions regardless of location or type. This represents a substantial initial investment that buyers must factor into their total acquisition budget.
Annual property taxes remain remarkably low at just $22 per property, making ongoing ownership costs minimal compared to many international markets. This low tax burden enhances the attractiveness of Zanzibar property investment.
Maintenance fees vary considerably by development type and location. Modern developments like Fumba Town and Soul Paje charge $1.10-2.00 per square meter monthly for basic maintenance and security services.
High-end complexes with extensive amenities charge approximately $2.00 per square meter monthly for services including pools, gyms, and concierge services. Power backup systems add roughly $0.09 per square meter monthly to utility costs.
Legal and registration fees typically range from several hundred to a few thousand dollars, depending on property complexity and due diligence requirements for foreign buyers navigating Zanzibar's leasehold system.
What budget ranges make sense for different investment strategies in Zanzibar?
| Investment Strategy | Recommended Area | Budget Range (USD) | Expected Yield | Key Considerations |
|---|---|---|---|---|
| Primary Residence | Urban/Coastal Apartments | $60,000-200,000 | Lifestyle Value | Lower ongoing costs, quality of life focus |
| Short-Term Rental | Beachfront Villas | $200,000-1,000,000+ | 12-15% | High seasonality, management intensive |
| Long-Term Rental | Urban Expat Zones | $80,000-300,000 | 8-10% | Steadier occupancy, lower management |
| Property Flipping | Development Areas | $80,000-300,000+ | 10-40% annually | Focus on new developments and emerging areas |
| Land Banking | Future Development Zones | $20,000-100,000 | Long-term appreciation | Infrastructure development dependent |
What legal structures exist for foreigners to buy property in Zanzibar?
Zanzibar operates under a leasehold system that allows foreign property investment while maintaining government control over land ownership.
Direct freehold land ownership is prohibited for foreigners, but all property transactions operate as leasehold arrangements with terms of 33, 66, or 99 years. These leases provide substantial ownership rights while maintaining legal compliance.
Condominium purchases under the Condominium Act allow foreigners to acquire 99-year leases that are inheritable, transferable, and government-approved. This structure provides the closest equivalent to freehold ownership available to foreign investors.
Registration with the Zanzibar Investment Promotion Authority (ZIPA) is mandatory for non-nationals purchasing property. This process ensures legal compliance and provides official recognition of foreign investment status.
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.
How does property financing work in Zanzibar—are mortgages available?
Property financing options for foreign investors in Zanzibar remain limited, with most transactions conducted on a cash basis.
Local bank mortgages exist but are rarely available to foreign buyers due to stringent requirements and risk assessment criteria. When available, local bank rates range from 10-18% annually with loan terms of 10-20 years and down payment requirements of 30-50%.
High-net-worth foreign clients may access offshore financing through international banks, though this typically requires substantial assets and established banking relationships. These arrangements often provide more favorable terms than local options.
New digital systems are being implemented to streamline loan applications, primarily benefiting locals and special resident categories. However, foreign investors should plan for cash purchases when entering the Zanzibar property market.
The cash-based nature of the market actually provides advantages for prepared investors, including stronger negotiating positions, faster transaction completion, and reduced financing costs that improve overall investment returns.
Which area and property type would position you best for short-term cash flow versus long-term appreciation?
The optimal Zanzibar property investment strategy depends on whether you prioritize immediate rental income or long-term capital appreciation.
For maximum short-term cash flow, beachfront villas or serviced apartments in Nungwi, Kendwa, or Paje offer the highest and fastest returns. These properties generate 12-15% annual yields through Airbnb and short-term tourist rentals, with premium beachfront locations commanding $200-300 per night during peak seasons.
Long-term appreciation strategies should focus on plots or new condominiums in rapidly developing areas like Fumba Town, Kizimkazi, or Stone Town's outskirts. These locations benefit from infrastructure development, government investment incentives, and growing expatriate demand while offering lower entry costs than established tourist areas.
A balanced approach involves urban apartments in Stone Town, which combine steady rental yields with moderate capital growth potential. These properties offer easier liquidity and resale options while providing exposure to both tourist and expatriate rental markets.
It's something we develop in our Tanzania property pack.
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.
Zanzibar's property market presents compelling opportunities for investors seeking exposure to East Africa's fastest-growing tourism destination.
Success requires careful consideration of legal structures, financing limitations, and market dynamics specific to this unique Indian Ocean investment environment.
Sources
- Vela Zanzibar Property Investment Statistics
- TheAfricanvestor Zanzibar Price Forecasts
- AirROI Zanzibar Market Report
- TheAfricanvestor Foreign Land Purchase Guide
- Airbtics Zanzibar Airbnb Revenue Analysis
- Vela Zanzibar Real Estate Market Outlook
- TheAfricanvestor Zanzibar Property Investment Guide
- RE/MAX Zanzibar Market Analysis 2025