Zanzibar real estate market continues to set the regional pace for growth, blending Indian-Ocean escapism with an increasingly sophisticated investment landscape. In the latest official data releases, tourism arrivals, GDP expansion and rental yields all sustained the island’s long-running, double-digit momentum—keeping beachfront plots scarce and eco-certified developments firmly in investors’ sights.
High-net-worth buyers from the Gulf, Europe and the African diaspora still dominate headline deals, while a steady stream of digital nomads props up short-let occupancy. Add a maturing land-lease framework and talk of a future “Golden Visa,” and Zanzibar’s property scene remains a compelling play on lifestyle, sustainability and capital appreciation—no matter when you first open this report.
Zanzibar welcomed 736,755 international visitors in 2024 (+15.4 % YoY vs 2023’s 638,498), a fresh all-time high and just shy of the government’s 800k target. Average stays stretched to eight nights—double the Indian-Ocean norm—underpinning hotel and Airbnb occupancy. The travel boom fed straight into GDP: Bank of Tanzania data show Zanzibar GDP growth accelerating to 7.5 % in Q3 2024 (up from 7 % a year earlier), driven chiefly by accommodation and food services.
Zanzibar’s Land Commission approved an estimated ~2,000 lease-transfer applications between November 2023 and October 2024 (author extrapolation from “Land Transfer Statistics” sample that shows the West Urban Region accounting for 30 % of filings). Market practitioners report that high-ticket foreign deals (≥ US$200k) represented c. 40 % of 2024 transactions—up from 33 % in 2023—as Gulf and European HNWIs chased larger villa plots. (No public registry; figure based on ZIPA permit disclosures, marked estimate.)
Take-away: 2024 locked in Zanzibar’s post-pandemic recovery—tourism at record highs, GDP above 7 %, and property prices still clipping along in the low-double digits. Yet supply is beginning to nibble at the luxury tier, setting the stage for a more nuanced, micro-market-driven 2025.
Four converging forces are fuelling purchaser appetite as the calendar flips to 2025—tourism tailwinds, a swelling remote-work tribe, deeper Gulf and diaspora capital, and friendlier residency rules.
A record 736,755 international arrivals in 2024 (+15.4 % YoY) pushed Zanzibar past its pre-Covid peak and within striking distance of the government’s 800 k target. Visitors stayed an average of eight nights, nearly twice the Indian-Ocean norm, and 87.8 % of them flew straight into Abeid Amani Karume International Airport—evidence that new European and Gulf routes are paying off. With 71 % of travellers still coming from Europe and inbound numbers from China and India surging 70–90 %, hot-season occupancy for villas and boutique hotels is forecast to tighten further, underpinning buy-to-let strategies aimed at rental yields Zanzibar 2025.
Zanzibar now counts “half a dozen” full-service coworking spaces in Stone Town, Paje, Jambiani and Fumba—up from just two before the pandemic. Fast-improving fibre links and relaxed visa renewals mean more location-independent professionals are trading Chiang Mai or Lisbon for kizimkazi sunsets. The typical Airbnb listing is booked for ≈41 % of available nights at an ADR of US$50, sustaining mid-to-high single-digit gross yields for owners targeting the remote-worker segment.
According to ZIPA-tracked transactions, the number of foreign investors purchasing property rose 20 % in 2024, with Gulf nationals, Germans, Poles and South Africans topping the buyer list. High-net-worth buyers are gravitating to turnkey, eco-certified villas in Kiwengwa, Kendwa and the emerging Fumba peninsula, where scarcity of titled coastal plots is pushing property prices Zanzibar up faster than urban condos.
May 2024 saw the first Class C11 “investor residence” cards issued—effectively a two-year, renewable stay permit for any foreigner investing ≥ US$100 000 in a ZIPA-approved project. Although still short of a full Zanzibar golden visa with citizenship rights, the scheme lets investors include spouse and up to four children, streamlining renewals that once required quarterly visa runs. Coupled with 99-year leaseholds and ongoing land-registry digitalisation, the new rules lower friction for foreign ownership Zanzibar and signal a friendlier policy stance going into 2025.
Tourism-led cashflow, remote-work demand, capital from regional HNWIs and a maturing investor-visa framework combine to keep demand ahead of the modest supply pipeline—setting the stage for another brisk year of transactions and above-trend price growth.
After half a decade of chronic undersupply, cranes are visible again—but delivery is lumpy and still heavily concentrated in just a few precincts.
Fumba Peninsula has been the island’s workhorse: more than 700 homes were finished in Phase 1 of Fumba Town, with a further 500 under construction by December 2024. In urban Unguja, the public-sector Kwa Mchina scheme delivered 72 apartments—the first ZHC blocks to come to market in almost a decade. Private-sector beachfront output was modest: roughly 250 turnkey villas spread across Nungwi, Kendwa and Jambiani during the four-year window (developer filings, no official register).
Government plans dominate the near-term schedule. The Chumbuni megaproject is slated for 3,000 units, with Phase 1 (1,095 units) mobilised in late 2024. Other Zanzibar Housing Corporation sites—Kisakasaka A (240 units), Kisakasaka B (544), Saateni (209) and Nyamanzi (120)—are queued behind it. On the private side, Fumba Town’s developer is marketing Phases 2-3, which would add about 1,500 homes over the next two years (developer statement; no third-party verification). North-coast resorts continue to file for low-density villa permits, but collectively amount to fewer than 200 units through 2026.
The environmental bar is rising fast. Fumba Town advertises solar-ready roofs and a 94% construction-waste recycling rate, while most new coastal lodges are pursuing EDGE or Green Key badges. Developers report that “green” certification now shortens ZIPA approval times and lifts presale velocity, suggesting sustainability will be priced in rather than treated as a premium add-on.
Vela Paje Zanzibar has filed for a compact, mixed-use community of 74 residences: predominantly apartments plus two standalone villas 300m from Paje Beach. Ground-breaking is expected this year; handover is pencilled for 2026, subject to permit timelines. An additional phase will be soon announced.
Even with the public-sector push, forecast deliveries through 2026 will barely dent Zanzibar’s estimated 60,000-unit housing gap. Supply remains tight enough to underpin prices—especially for projects that can prove their eco chops.
Five years of data confirm a single story: beachfront dirt still outperforms bricks and mortar, yet urban character homes in Stone Town are quietly closing the gap.
Listings across Kiwengwa, Matemwe and Pemba now quote US$23–35 /m² for shovel-ready coastal plots, up from roughly US$18–24 /m² in 2019—an implied compound annual growth rate (CAGR) of 8–10 %. Current asks include a Pemba parcel marketed at US$23.8 /m² and a Michamvi seafront tract at US$34.7 /m².
Heritage and new-build stock inside Stone Town’s UNESCO core has posted similar momentum, albeit off a far higher base. A 360 m² restored villa listed in January 2025 at €3,755 /m² (≈ US$4,130) sits at the top of the market, but agent surveys place the median resale band around US$1,800–2,200 /m², up from US$1,250 in 2019 (≈ 8–9 % CAGR). The price gap between raw beachfront land and habitable Stone Town apartments therefore remains wide—roughly 1:80 on a per-square-metre basis—but it has narrowed by about ten percentage points since the pandemic.
Gross yields on professionally managed holiday villas cluster in the 12–15 % range in tourism hot-spots such as Paje, Nungwi and Jambiani, according to multiple brokerage round-tables and media tallies. Operators attribute the spread to seasonality, management fees (typically 20–25 % of top-line), and whether units tap into all-inclusive resort inventory.
Conventional twelve-month leases aimed at expat professionals and NGO staff trail behind but still clear local bank deposit rates: 7–9 % gross is typical for a mid-market two-bed in Fumba or Mbweni, based on quoting rents collated from three leading letting agents (author interviews, April 2025). Net yields compress by a further 1.5–2 points once service charge, maintenance and land-lease fees are stripped out, yet remain attractive versus regional peers—Nairobi and Cape Town prime lets averaged 3.8 % and 4.1 % respectively last year (Knight Frank Africa Report 2024/25).
Even after a torrid run-up, Zanzibar’s coast still offers double-digit returns where land cost is low and daily rates stay buoyant, while urban UNESCO stock provides lower-beta income with meaningful heritage upside. Investors chasing rental cash-flow should stress-test seasonality, but the pricing floor looks solid so long as tourism keeps setting records.
Zanzibar’s legal framework has inched — not leapt — forward, but three quiet rule-changes in 2024/25 materially affect deal underwriting for foreign buyers.
February 2024’s Investment Act overhaul introduced a one-year grace period on ground-rent (“land lease”) payments for standard projects and up to five years for “Strategic Investments.” It also granted 100 % foreign ownership inside approved schemes and fixed a sliding-scale rent that now starts at about US$1 per m² pa for rural plots and US$5 per m² for prime coastline (Government Schedule 7205). A full-scale fee review is under way for 2025; ZIPA is canvassing developers on a possible index-link to tourism-receipts rather than blanket increases.
Zanzibar’s new Class C11 “real-estate residence permit” came into force mid-2024. It costs US$550 for two years (US$300 for EAC citizens), covers spouse + four children, and renews automatically while the property is held. The permit does not confer work rights, but it removes the old quarterly “visa-run” headache for landlords.
A fresh Business Licensing Management & Regulatory Act (assented March 2025) centralises all tourism and rental-hosting licences under a single online window, trimming approval time to an advertised 30 days and capping discretionary fees.
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The playing field has tilted slightly in favour of foreign capital—thanks to tighter escrow rules, clearer titles and a fast-track residency card—yet the state still owns the ground beneath every villa. Factor those lease fees, renewal mechanics and tax-clearances into your IRR, and Zanzibar remains a navigable, if paperwork-heavy, doorway to Indian-Ocean yields.
Using the latest macro inputs—record 736,755 visitors in 2024, a projected 7.2 % GDP print for the year, a policy rate locked at 6% and a shilling hovering around TZS 2,730/US$—we model three plausible price paths.
A steady-state scenario assumes tourist arrivals climb another mid-single-digit percentage each year, the central bank keeps rates at 6 % through 2026, and the shilling trades flat-to-mildly weaker. In that environment, coastal and UNESCO-zone homes should appreciate ≈5–7 % per annum, delivering a cumulative 10–15 % gain by end-2026 while gross rental yields hold in the high-single digits. Premium properties in Paje or Nungwi are expected to outperform, with gross rental yields reaching 12–15 %. Delays at big public schemes temper supply-side pressure, preventing a glut.
If Zanzibar formalises a true “Golden Visa” by early 2025 and Pemba’s airport expansion plus new Gulf and European direct routes come on-stream faster than scheduled, demand could jump markedly. Add a benign global rate cycle and you have the makings of a mini-boom: prime beachfront could spike 15–20% over two years, Stone Town heritage units perhaps 12–15%, and yields compress slightly as capital values outrun rents. Risk: policy execution—if visa legislation or airport phases slip, the uplift fades as quickly as it arrived.
A sharp tourism slowdown—say, a Middle-East geopolitical shock or global recession—combined with a 10% shilling slide and an emergency rate hike to 8% could flatten or shave prices. Oversupply in select luxury nodes would exacerbate the drop; our model shows 0 % to –5% total movement through 2026 under that stress. Core, well-tenured properties would tread water; fringe, over-levered projects could see deeper discounts until demand normalises.
Key sensitivities to watch
The baseline still looks most probable: mid-single-digit growth in both tourists and prices, powered by Zanzibar’s structural undersupply and rising eco-project premium. Yet the hinges are clear—policy follow-through, currency stability and flight-lane expansion will decide whether 2026 prints a gentle plateau or another record-setting rally.
Zanzibar’s blue-economy ambitions and strict land-tenure rules create a market where upside and downside sit cheek-by-jowl; savvy investors weigh both with equal care.
Zanzibar still offers outsized returns relative to regional peers—provided investors blend beachfront romance with forensic title work, build-cost discipline and a clear-eyed view of climate adaptation. Fanya uamuzi kwa busara—make your decision wisely.
Zanzibar real estate market 2025 remains a rare blend of lifestyle, sustainability and alpha—all underwritten by record tourist inflows and a maturing investor framework. For seasoned buyers, the message is clear: focus on well-tenured, eco-aligned assets, stress-test climate and currency risks, and lean into the island’s still-nascent supply cycle.
Ready to translate analysis into action? Preview floor plans, yield models and ESG specs for Vela’s 74-unit Paje community.
