Low GDP, but Zanzibar, Tanga go for detached buildings

Dar es Salaam. West Urban and Tanga regions are struggling  to grow their respective economies, yet they have outpaced Mwanza, the country’s second largest economy in terms of hosting more detached buildings.

Available data shows  Tanga’s Gross Domestic Product (GDP) stands at Sh7.495 trillion, trailing other regions with  the largest economies, but West Urban is far below the giants.
The just released preliminary results for 2022 population and housing census, suggests both regions (West Urban and Tanga), are ranked the third and the fourth in Tanzania, with at least 5,453, and 4,282 storey houses, respectively.

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The results indicated that the country’s economic superpower Dar es Salaam with 32,219 storey structures, leads the country’s top-ten regions that have more detached buildings.
Arusha (7,180) is positioned as number two followed by West Urban (5,453), Tanga (4,282), Kilimanjaro (3,540), Mwanza (2,481), Pwani (1,885), Dodoma (1,461), Morogoro (1,331) and Mbeya (1,073).
Real estate experts are of the view that there are other factors which may not necessarily reflect the internal wealth of the said regions, but plays a crucial role in enticing people to construct tall buildings.

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For Mr Khalid Ally Salum, Unique Property managing partner, thinks one needs to have enough financial resources for such developments, but he/she may not necessarily be a resident of a particular region.
“For instance,” he said, “there is this appetite for luxury accommodation in Zanzibar and investors are in search of opportunities; they are looking for incentives that would ease their investment undertaken.”
He therefore cited the investors behind Fumba Town, Blue Amber Resort, the proposed Domino Tower saying they were foreigners, responding to demand and opportunities that isle offers.

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According to him, the government created a conducive environment that has attracted such development, which in turn would later translate into economic prosperity of the region and the country as well.
“In 2018 Zanzibar opened its doors to non-Tanzanian resident investors whose investments will be protected by law and international conventions to own properties in the isle.
This, according to him, has allowed potential property owners to gain significant tax benefits and relief such that, he/she will not be obliged  to pay capital gains tax, stamp duty or inheritance tax,” he observed.
“Property investors, together with their spouses and any children under the age of 25 can be eligible for residence permits lasting the duration of their ownership of a property,” he said.
Furthermore, said he: “Apart from property investors, but also the Zanzibar diaspora are doing great job, with their exposure to the international world, have massively invested in the construction of commercial and private homes.”

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On the other hand, the local real estate expert said that since ports are considered to offer an additional value in terms of social and economic benefits in its region, then both Zanzibar and Tanga ports would also be a determinant factor.
“Where there’s a harbour, then there is business, so you need decent dwellings to accommodate the influx of businesses, mind you; in their respective stands, both Zanzibar and Tanga, do serve as tourism attractions which is an added advantage,” he expounded.
On his part, Mr Gerard Temu, an independent business consultant said: “I think another factor is, Mwanza has limited supply of developable land available to invest in, the thus increased price if you are to buy a parcel.”
Adding: “Speaking from a geographical point of view, Mwanza has attracted many developers, as a result, the area is extremely competitive in terms of land parcels. In Mwanza, one will need to have more money to buy a similar parcel that is sold cheaply in Tanga.”
According to him, Zanzibar and Tanga are perceived as new markets, and with the modern world – urbanisation, then vertical construction, which is an appropriate way to utilize land, the storey houses development, apparently becomes a desired model.
“For me it is much more to do with land affordability as well as investment attractions and incentives provided, which in the long run, would make good returns especially if the developments are meant for commercial purposes,” he noted.
Mr Temu further said: “Zanzibar has now become one of the country’s newest investment locations. As a result, there are impressive developments for investors seeking to catch a market that is ripe for investment, and most of these are in the West Urban region.”
According to him, with tourism figures rising coupled with the country’s economic stability as Tanzania has enjoyed relatively high economic growth over the last decade, averaging 6-7 percent per annum, then Zanzibar is expected to have more stunning holiday home developments.
Commenting on, Mr Athuman Sadik, a builder in Mwanza explained that his city has become expensive to build as land prices are becoming more expensive, and that could be the reason why property developers sideline the region.
He builds his argument saying: “Mwanza is the second most populated city in Tanzania, of course the second largest economy in the country. Mwanza has a population density of 134 people per sq. km thus the second after Dar es Salaam, the city’s large part is water and hills which makes land expensive.
Moreover, said he: “Although the geographical features of the region doesn’t affect property investments, one will need adequate funds as apart from the structure features, the nature of the soil will determine and add more cost of construction.”
Therefore, he was of the view that Zanzibar and Tanga might be cheap, yet with the promising future, no doubt, the regions hosts more storey houses than what Mwanza has.