Zanzibar Real Estate: 2025 Market Trends & Investment Outlook

Zanzibar Luxury Properties
Oct 13
2 min read

As Zanzibar's real estate market continues to evolve in 2025, both local and international investors are keenly observing the island's dynamic landscape. Here's an overview of the current trends and forecasts shaping the property sector.

Market Growth & Price Trends

Zanzibar's property market is experiencing steady growth, with annual appreciation rates of 5–7% across the island. Prime beachfront areas like Nungwi and Jambiani have seen even higher increases, with prices rising by 10–15% in the past year.

Looking ahead, analysts forecast continued price increases of 7–10% per year over the next five years, driven by factors such as increased tourist traffic, steady economic growth, and infrastructure development.

Property Types & Investment Opportunities

Zanzibar offers a diverse range of properties catering to various investment preferences:

Beachfront Villas: Prices range from $325,000 to over $2 million, with annual appreciation rates of 10–15%. These properties are particularly attractive for short-term rentals due to high demand from tourists.
City Apartments: Located in areas like Stone Town, these properties are priced between $58,000 and $150,000, with annual appreciation rates of 3–7%. They offer steady rental income potential.
Coastal Plots: Priced at $23–35 per square meter, these plots have seen annual appreciation rates of 7–10%, making them appealing for long-term development projects.
Luxury Apartments: With prices ranging from $150,000 to $500,000, these properties have annual appreciation rates of 7–10% and are situated in prime locations with high rental demand.
Rural Properties: Priced between $50,000 and $200,000, these properties offer annual appreciation rates of 5–7% and are suitable for those seeking tranquility away from urban centers.

Foreign Investment & Market Dynamics

Zanzibar's real estate market is increasingly attracting foreign investors, with high-net-worth individuals from regions such as the Gulf and Europe showing interest. In 2024, high-ticket foreign deals (≥ $200k) represented approximately 40% of transactions, up from 33% in 2023.

The limited supply of new units—estimated at just 600–800 before 2026—combined with robust demand from rising tourist arrivals and an expanding foreign-buyer base, keeps upward pressure on prices.

Infrastructure & Development Outlook

Infrastructure improvements have transformed Zanzibar from a back-packers' haven into a new luxury destination. Better roads and services have created an 'easy paradise' similar to high-end Caribbean destinations, attracting wealthier property investors.

The government's continued investment in infrastructure, coupled with stable foreign direct investment inflows and urbanization trends, is expected to sustain the positive momentum in the property sector.

Key Takeaways for Investors

Steady Appreciation: Zanzibar's property market is experiencing consistent growth, with prime locations seeing higher appreciation rates.
Diverse Investment Options: From beachfront villas to rural properties, there's a range of options catering to different investment preferences.
Strong Rental Yields: Properties in tourist hotspots offer attractive rental yields, driven by high demand from visitors.
Foreign Investment Opportunities: The market is increasingly open to foreign investors, with favorable conditions for property ownership.
Infrastructure Development: Ongoing improvements enhance the appeal of Zanzibar as a destination for both living and investment.