LAND SUB-SECTOR MARKET

The land market involves land that has no buildings, empty land or open spaces surrounded by buildings.

TYPES OF LAND ACCORDING TO SURVEY STATUS

• 1: SURVEYED LAND: In Tanzania, only 15% of the land has been surveyed. Surveyed land shows the specific plot number, block, location (City/Municipality/Town, Ward, Street, etc.), and its measurements such as coordinate points (Easting & Northing, Latitude & Longitude, UTM, etc.) on a map.
• 2: NON-SURVEYED LAND: This refers to land that has not been surveyed and lacks basic information about the specific area. More than 84.67% of land in the country remains unsurveyed.

DISTRIBUTION OF LAND IN TANZANIA

In Tanzania, land is categorized into the following three main groups:

• 1. GENERAL LAND: This includes land found within City Councils, Municipalities, Towns, and Small Townships, as well as areas near urban centers.
• 2. RESERVED LAND: Reserved land is divided into three main parts:
  • A. Wildlife and Forest Reserves Land – This land is set aside for the conservation of wildlife, forests, and natural vegetation.
  • B. Military Land – This land is designated for use by the Tanzania People’s Defence Force, National Service, Police Force, etc., for their operations.
  • C. Government Land Bank – This land is reserved for future government use and development.
• 3. VILLAGE LAND: This land is allocated to villages and is governed under customary law. Each village has a different land size based on various criteria from both pre- and post-colonial periods. Many villages were established during the era of Ujamaa (socialism and self-reliance) under the leadership of the Father of the Nation, Mwalimu Julius K. Nyerere. Currently, there are over 8,400 villages with recognized land ownership in the country.

CONCLUSION

Tanzania possesses vast land compared to other East African countries. However, land ownership in urban areas is highly competitive due to the rapid urbanisation rate. This trend paints a clear picture that in the next 30 years, land ownership will be highly competitive, as land usage continues to increase significantly both by citizens and the government.

FIVE MAIN BENEFITS OF INVESTING IN REAL ESTATE

• 1. Appreciating in Value – Land and property values tend to increase over time.
• 2. Store of Value of Currency – Real estate helps preserve the value of money by acting as a stable investment.
• 3. Indirect Impact of Inflation – Real estate is less directly affected by inflation compared to other assets.
• 4. Artificial Appreciation through Properties – The value of land can increase through the development of buildings and infrastructure.
• 5. Competitive Demands – There is a growing demand for real estate, making it a competitive and potentially profitable investment.

ECONOMIC BENEFITS OF INVESTING IN REAL ESTATE

• 1. Forced Appreciation – Enhancing and increasing the value of assets over time; for example, renovating a house or building can raise its rental value for tenants.
• 2. Tax Dodge or Tax Avoidance (Legally) – Legally, an investor may pay less tax or even be exempted from tax by the government as an incentive for contributing to national development through housing or infrastructure projects.
• 3. Influence on Self-Esteem and Confidence – Owning buildings or houses boosts the owner’s self-confidence, influencing economic, social, political, and cultural growth.
• 4. Ability to Change Property Use – Real estate offers flexibility, e.g., a residential house can later be converted into business premises as population and demand grow.
• 5. Generational Wealth – Real estate assets often benefit more than one generation. Example: Wealthy families in Florence, Italy, or in Kariakoo, Dar es Salaam inherited buildings from their forefathers.

DRIVERS OF LAND USE GROWTH IN TANZANIA

• 1. RAPID POPULATION GROWTH: Tanzania is among the fastest-growing populations in Africa, with a growth rate of 3.1% per year. This large population increase contributes to a significant rise in land usage across the country.
• 2. URBANISATION: Urban population growth in Tanzania exceeds 5.9%, with 34.3% of the population living in urban areas by 2020.It is projected that by 2040, over 50% of the population will reside in urban areas.The main reason for this urban growth is the migration of youth from rural areas in search of jobs and better living conditions.Additionally, some rural areas are developing into small towns, all of which increase land consumption.
• 3. INCREASING HUMAN ACTIVITIES:
  • A. Construction of Settlements – The rising population drives the demand for housing, which significantly increases land usage.
  • B. Commercial Investment in Properties – There is growing investment in various types of buildings, especially in the hospitality sector (e.g., hotels), retail (shops), high-rise buildings, guest houses, restaurants, entertainment and conference venues all of which require land.
  • C. Infrastructural Development – The government has heavily invested in infrastructure to attract further investment. Examples include:
    • Tarmac roads connecting regions, towns, districts, and zones.
    • Bridges, bus terminals, and the Bus Rapid Transit (BRT) system.
    • The ongoing construction of the Standard Gauge Railway (SGR).
    • Urban and rural roads via TARURA (Rural and Urban Roads Agency).
    These developments have opened up many areas, facilitating real estate investment by reducing transport costs, improving logistics, and easing access to construction materials all of which increase land usage.
  • D. Growth of Administrative and Political Activities – As population and settlements grow, so do political and administrative needs. This leads to construction of:
    • Government leaders’ offices
    • Residential houses for leaders
    • Political party offices
    In Tanzania, the increase in the number of regions and administrative divisions has led to the need for more government facilities and thus greater land use.

CONCLUSION

The various uses of land in Tanzania are rapidly increasing, signaling the importance for every individual to secure a Land Title Deed to be formally recognized as a rightful landowner.

FIVE FUNDAMENTAL THINGS ONE MUST HAVE TO SUCCEED IN INVESTMENT

• 1. KNOWLEDGE – Having the right understanding of what you’re investing in is essential. You must be well-informed about the specific type of investment you’re pursuing.
• 2. SKILLS – To succeed in any investment, you must know how to do it. Note: Success in anything requires having the right set of skills to execute your plans effectively.
• 3. RESOURCES – Different kinds of resources are what enable you to succeed in an area where you already have knowledge and skills. Note: Resources such as time, money, people, equipment, systems, and mindset are all critical in any kind of investment.
• 4. NETWORK AND CONNECTIONS – Your relationships with people play a vital role in building and sustaining your investment. In today’s world, “who you know” can be just as important as what you know. Strong connections can open doors to opportunities, partnerships, and support.
• 5. REPUTATION – Beyond your knowledge, skills, resources, and connections, what also matters is: How do people perceive you? Your reputation shapes how others trust and engage with you. Note: When people believe in you and appreciate what you do, success often follows more quickly although building a strong reputation takes time and consistency.

BASIC STEPS BEFORE MAKING ANY INVESTMENT IN REAL ESTATE

• 1. PREPARATION – Whether you want to build a residential house, buy a home, or build and purchase commercial buildings, you must prepare for:
  i. The costs of the building, house, and land.
  ii. Proper selection of location.
  iii. Criteria based on your economic activities or investment purpose
• 2. SUSTAINABLE PLAN TO SAVE MONEY – Before investing in land, buildings, or houses, it is advisable to have savings to start your investment process. Having a sustainable plan to preserve money is crucial before building or buying any property.
• 3. BUYING LAND – Once you have accumulated a certain amount of money, the next step is to purchase land according to your income, the importance of the investment, and the choice of location.
• 4. STARTING CONSTRUCTION OR BUYING A BUILDING – After purchasing the plot, you can begin construction if ready. Alternatively, you can directly buy an existing building, though each option has its own advantages and disadvantages.

CONCLUSION

Investment in REAL ESTATE – land, houses, and buildings – requires many factors, making it more complex than other sectors.

KEY FACTORS & CRITERIA AN INVESTOR SHOULD CONSIDER BEFORE BUYING LAND

I. ESSENTIAL FACTORS:

• 1. INFRASTRUCTURE – Availability of essential infrastructure, especially roads.Other crucial infrastructure includes railways, airports, and ports, which support daily operations and long-term investment value.
• 2. SOCIAL SERVICES –
  A. Basic Services: Presence of clean water, electricity, and other utilities.
  B. Developmental Services: Access to schools, hospitals, shops & markets, sports grounds, and financial services such as banks and mobile money agents.
• 3. LAND & AREA SECURITY
  –A. Dispute-Free Land: The land should have no history of conflicts or ownership disputes.
  B. Safe Neighborhood: The area should be free from criminal groups or high crime rates.
  C. Natural Disaster History: The land should not be prone to natural disasters like earthquakes or volcanic eruptions though it’s important to note that natural disasters can occur anywhere.
  D. Environmental Safety: Land should be free from toxic chemicals and environmental pollution that may affect human health or future development.
• 4. AVAILABLE OPPORTUNITIES –
  A. Economic Activities: Presence of various businesses, companies, and signs of urban growth (urbanisation) indicate potential for returns on investment.
  B. Social Activities: High population density opens opportunities for developing social facilities like churches, mosques, institutions, event and conference halls, etc.
• 5. LEGAL & SECURITY INSTITUTIONS – Accessibility to police stations, courts, and government offices ensures legal protection, order, and administrative support for your land and future developments.
• 6. GOOD LANDSCAPE / ENVIRONMENT – Look for land in a peaceful and well planned area, with an attractive environment (e.g., quiet neighborhoods, hillside plots, scenic views, etc.). Plots in appealing parts of a city especially those on elevated or prime locations usually have higher value and greater investment appeal.

II. CRITERIA:

• 1. LEGALLY OWNED LAND – The land must be legitimately owned, whether surveyed or unsurveyed. Both the buyer and seller must engage in transactions involving legally recognized ownership.
• 2. EASILY ACCESSIBLE LAND – Land should be reachable through proper infrastructure, especially roads whether in urban areas or outskirts. Even for agricultural land (farms), it should be in locations that are easy to access.
• 3. VALID DOCUMENTATION – Legally owned land must have authentic documents. In various parts of the country, some plots or farms have forged or fake documents, leading to ownership conflicts and disputes.
• 4. LAND DESIGNATED FOR SPECIFIC USE – It is very important to know the zoning and designated land use before buying especially in urban areas and conservation zones. Example: Many people unknowingly buy land in reserved areas or open spaces (OS) which are not meant for private development.
• 5. ACTUAL LAND VALUE & BUDGET – Know the actual market value of the land in the area before making a purchase.As a buyer, you must have a realistic budget to make informed decisions. Example: If your budget is limited and you wish to buy land in a city, it may be wiser to opt for land on the outskirts, where development is growing rapidly, instead of taking unnecessary debt just to buy land in the city center.

CONCLUSION

Investment in real estate, especially land or plots, is productive, preserves money, and generates profit over time. Start buying land or plots.

MAIN BENEFITS OF INVESTING IN LAND

• 1. INCREASE IN LAND VALUE – Due to urban growth, population increase, infrastructure development, and establishment of residential areas and government offices.
• 2. ACCESS TO LOANS – Owning land or buildings with a valid title deed allows you to use them as collateral to secure loans from banks and financial institutions.
• 3. DEVELOPING RESIDENCE – Land ownership makes it easier to build your own home and establish a permanent settlement.
• 4. OPPORTUNITY TO INVEST IN REAL ESTATE PROPERTIES & ASSETS – Land can be developed for commercial buildings, entertainment venues, tourism projects, residential rentals, or industrial sites.It can also be used for agriculture.
• 5. STORE OF VALUE FOR MONEY – Land acts as a hedge against inflation, meaning it helps preserve the purchasing power of your money over time.Unlike cash in banks, which is subject to fees, inflation, and low interest returns, land value typically increases. Example: Someone who bought land in Mwenge, Dar es Salaam, for TSh 13 million about 10 years ago has now sold it for TSh 300 million, making a profit of over 2208%. If the same money had been saved in a bank account (even with interest), it likely wouldn’t have exceeded TSh 20 million due to deductions, account maintenance fees, and inflation (which ranged from 3.5% to 8% over that period).
• 6. INHERITANCE POTENTIAL – Land is one of the few assets that can be passed down from one generation to another.It holds lasting value and can serve as a foundation for generational wealth, allowing families to build long-term security and legacy.

CONCLUSION

Investment in REAL ESTATE, especially in the land sector, requires patience and deep market understanding. Returns may not be immediate, but with the right knowledge and long-term vision, it is one of the most secure and profitable investments you can make.