THE HOUSING MARKET IN TANZANIA (RESIDENTIAL MARKET)

The housing market in Tanzania is dominated by private individual owners (citizens) and public institutions such as NHC, NSSF, and TBA. Below is an overview of the key stakeholders, investment reasons, challenges, and growth drivers in the sector.

Main Stakeholders

• 1. Individuals with Unsurveyed Dwellings – 70.00%
  Example: Houses in rural areas and some older houses in urban areas.
• 2. Individuals with Surveyed Dwellings – 13.50%
  Example: Houses located in cities and small towns.
• 3. National Housing Corporation (NHC) – 5.10%
• 4. Private Companies/Investors & Real Estate Developers – 3.90%
• 5. Central Government – 3.00%
  Example: Residential houses for high-ranking government officials such as ministers, judges, directors, etc.
• 6. Pension Institutions (NSSF & PSSSF) – 2.40%
  Example: Investment housing projects in major cities and urban centers.
• 7. Local Government Authorities – 2.10%
  Example: Investment houses for rent or for accommodation of local leaders.

Why Invest in Housing / Residential Property

• 1. Rapid Population Growth: Tanzania’s population is projected to double by 2050, exceeding 100 million people, ensuring sustained housing demand.
• 2. Rising Demand for Modern Housing: The growing middle class is creating a market for modern and attractive housing, especially in urban areas.
• 3. Fast Growth of Major & Secondary Cities: Urban centers like Dar es Salaam, Dodoma, Arusha, and Mbeya are expanding rapidly, driving housing demand.
• 4. Government & Bank Support: Banks are offering mortgage loans such as NMB Makazi Loan, CRDB Jijenge Loan, and PBZ Housing Loan to promote home ownership.
• 5. Cross-Border Integration: Tanzania’s peace and stability attract foreign nationals (from Kenya, Congo, Burundi, Uganda, etc.) to invest or settle.

Note: Housing demand in Tanzania remains high and continues to grow due to increasing population and urbanization.

Challenges Facing the Housing Sector in Tanzania

• 1. Income Constraints & Limited Mortgage Access: Most citizens cannot afford modern homes or qualify for housing loans.
• 2. Multiple Taxes & Charges: Taxes like 18% VAT increase housing costs, making ownership difficult for many.
• 3. Underdeveloped Infrastructure: Poor infrastructure causes uneven land values even within the same towns.
• 4. Fluctuating Investment Policies: Frequent regulatory changes negatively affect investor confidence.
• 5. Unreasonable Rent Prices: Excessive rents by landlords force frequent tenant movement in urban areas.
• 6. Rising Construction Costs & Limited Materials: High costs and scarcity of reliable local materials (cement, steel, timber, etc.) make construction expensive.

Conclusion: Despite challenges, investing in real estate remains profitable. You can start small by buying affordable plots or directly purchasing completed homes as your first investment.

Drivers of Housing Growth in Tanzania

• 1. Population and Housing (Demographics): With an annual growth rate of 3.1%, Tanzania’s population expansion fuels housing demand nationwide.
• 2. Urbanisation: Urban population grows above 5% annually. By 2040, over 50% of Tanzanians will live in cities due to rural-urban migration.
• 3. Government Initiatives: Through institutions like NHC, TBA, and NSSF, the government develops affordable housing to reduce the 3 million-unit deficit.
• 4. Entry of Multinational Companies & Private Investors: Economic stability attracts investors and developers offering modern housing.
• 5. Infrastructure Development: Roads, bridges, SGR railway, BRT, and TARURA projects have enhanced accessibility and reduced construction costs.

Conclusion: Tanzania’s urban growth and improved living standards continue to boost the real estate sector — especially in residential housing featuring modern and diverse styles.