M a r k e t N e w s
Tanzania: Affordable Houses Key to Profits in Real Estate Market
Posted on : Friday, 24th February 2017
Reports indicating that real estate developers and agents found it difficult to find clients to buy and rent high-end properties last year should give them a complete shift in their business models. Developers will be required to adjust to the new economic realities and come up with the type of houses that meet the capabilities of a majority of Dar es Salaam residents.
With a deficit of three million housing units, the market is still vast for developers. The problem, however, is grounded on the fact that most of the past projects were largely meant for high-end clients, those who were capable of paying at least Sh100 million for a unit.
With the government's crackdown on corruption, coupled with its austerity measures--resulting into a drastic cut in public servants' foreign trips and seminars thereby reducing their disposable incomes--very few Tanzanians are still able to afford the luxury of buying/renting expensive houses.
However, if available data is anything to go by, then developers have the opportunity to reap handsome profits if they inject ample resources in budget housing units.
According to the African Development Bank, the Dar es Salaam population--currently standing at 4.1 million--is expected to grow by more than 85 per cent through 2025.
In fact, it is envisaged to achieve a megacity status--with about 10 million residents--by the early 2030s. That notwithstanding, a recently released World Bank report shows that Dar es Salaam's real estate is worth $12 billion (Sh26.2 trillion), compared with Nairobi's $9 billion (Sh19.8 trillion) and Addis Ababa's $6 billion (Sh13.2 trillion).
What these figures show is that despite last year's challenges, Tanzania' real estate industry is still lucrative and growth prospects are very much there. Developers are only required to invest in affordable properties that could be accessed by a majority of the population.
Source : allafrica.com
