Real Estate Sector Profile

Tanzanian Real Estate sector is experiencing a boom as both local and international investors stream into the country to cash in on the inadequate housing. The demand for affordable houses has continued to grow. For instance real estates and business services recorded a growth rate of 6.3% in 2012. The growth rate is attributed to increase in the overall weighted index of business services, rented dwellings and owner occupied dwellings.

Characteristics of the sector

• Foreign investors are growingly becoming interested by real estate plays in a market.
• The demand for affordable housing is high as a result of the rising population
• High rise structures
• Rents are expected to be steady because most structures in the pipeline fall short of major tenants
• Real estate developers are targeting more on building grade A houses focusing on expatriates whose market is saturated
• Rural urban migration as people search for jobs and better opportunities continues to pile pressure on the housing sector.

Market for Real Estate

Office market
Dar es Salaam is Tanzania’s largest city and most important commercial centre. Due to it being the city, the demand for office space continues to be high. The main office locations in Dar es Salaam are the traditional CBD, the Gardens area to the east of the city.

Retail market
Mlimani City Mall remains Dar es Salaam’s largest purpose-built shopping centre. With the failure to develop Dar Village, no other competing developments have yet been completed


Investment opportunities in the sector

• The current development projects that are under way as well as those that are being planned have created opportunities for interested investors.
• Development of retail, industrial and residential spaces as well.
• Provision of mortgage finance

Challenges in real estate sector

• Introduction of VAT on sale of properties
• Lack of enough developers which leads to short supply of affordable houses
• High costs of transfer and delays in the process of sale of some houses
• Poor statistics affecting growth of domestic real estate sector
• Facing acute shortage of houses as the population in urban areas increase
• The supply of high end and middle level residential units in the country is limited, estimated at between around 6,000 and 8,000.