Should You Invest In Tanzania or Kenya?

Foreign investors and expats looking to grow their property portfolios in East Africa often compare Tanzania and Kenya. Both countries have thriving urban centers, growing populations, and promising markets. However, for investors seeking long-term returns, lower risk, and untapped opportunities, Tanzania often stands out.

At Elegant Designs, we help investors navigate Tanzania’s real estate landscape and make informed decisions that maximize returns. Here’s why Tanzania is an attractive choice.

1. More Predictable Regulations

Kenya has experienced challenges with land disputes, unclear ownership records, and frequent regulatory changes. According to the Kenya Property Developers Association, over 30% of projects in Nairobi face delays due to regulatory hurdles, which can push costs up by 15–20%.

Tanzania has made strides in streamlining land leases and building approvals. Foreign investors can obtain long-term leases of up to 99 years, and with proper legal guidance, securing permits is typically faster and less risky. Predictable regulations reduce uncertainty and make it easier to plan projects and calculate returns.

2. Lower Entry Costs with High Growth Potential

Land prices in Nairobi’s prime areas like Westlands and Kilimani can exceed USD 1,500 per square meter, while construction costs average USD 900–1,200 per square meter. This high entry point limits ROI for new investors.

In comparison, Dar es Salaam’s prime areas like Masaki, Oysterbay, and Mikocheni still offer land at around USD 600–800 per square meter and construction costs between USD 700–1,000 per square meter. This allows investors to start with lower capital yet benefit from urban growth and increasing rental demand. 

3. Less Market Saturation

Kenya’s urban property market, especially in Nairobi, is highly competitive. Reports indicate that over 80% of high-end apartments are already occupied, leaving limited room for new entrants.

Tanzania’s emerging commercial and residential zones are less saturated. For example, areas like Kigamboni in Dar es Salaam have seen population growth of 10–12% annually over the past five years, while supply of high-quality residential and mixed-use developments has not yet caught up. Investors who enter early can secure prime locations with strong rental potential. 

4. Strong Tourism and Economic Growth

Tanzania’s tourism sector contributes around 17% of GDP, driven by destinations like Zanzibar, Kilimanjaro, and national parks. This boosts demand for short-term rentals, serviced apartments, and hospitality properties.

Urban areas also benefit from government infrastructure projects, including a USD 1.2 billion port expansion in Dar es Salaam and new road networks connecting major cities. These developments increase property value and attract higher-end tenants.

5. Favorable Investment Environment

Foreign investors in Tanzania enjoy a clear path to property acquisition through long-term leases. The country has over 5,000 registered foreign-owned property leases with minimal legal disputes reported when proper due diligence is conducted.

Compared to Kenya, where legal fees and dispute resolution can consume up to 5–10% of a property’s value, Tanzania presents a smoother, lower-risk investment environment.

Final Thoughts

While Kenya has established markets, Tanzania offers lower entry costs, fewer regulatory headaches, and untapped growth potential. For foreign investors and expats aiming for strong long-term returns, Tanzania presents opportunities to build income-generating properties in emerging high-demand areas.

If you want guidance on investing in Tanzanian real estate, Elegant Designs can help you plan, design, and execute projects that deliver strong returns.

📩 Email us at designers@elegant.africa. 
📲 WhatsApp us at +255 745 749 973