Housing Finance in Tanzania


This profile is also available in French here.

To download a pdf version of the full 2020 Tanzania country profile, click here.

Tanzania is an East African country that borders on the Indian Ocean. The population was estimated at 58 million in 2019, having grown by three percent. Approximately 34.5 percent of the population live in urban areas and 65.5 percent live in rural areas. Over 60 percent of the population in urban areas live in informal settlements, which are often associated with poor basic amenities. Tanzania has a population growth and urbanisation rate of 2.95 percent and 5 percent, respectively. Forty-seven percent of Tanzania’s population are estimated to be living below the national poverty line. In the decade ahead, Tanzania’s rapid urbanisation rate will continue to put pressure on the need to adequately meet surging demand for affordable housing and basic services, which has now been exacerbated by the COVID-19 pandemic.

Tanzania reported its first case of COVID-19 on 16 March 2020 but did not order a lockdown. Instead, the country shut down learning institutions, banned public gatherings, imposed mandatory self-quarantine for travellers from risk areas, and limited travel by citizens to other countries. The Bank of Tanzania (BOT) reduced the discount interest rate by two percentage points as well as the cash reserve ratio for banks by the same margin. The government of Tanzania also authorised commercial banks to renegotiate loans with customers. This could include increasing repayment periods and reducing installment amounts. In the housing sector, a moratorium on evictions was put in place and the government further responded to the impact COVID-19 had on informal settlements through public awareness campaigns.

The economy grew by 5.7 percent in the first quarter of 2020, mainly attributed to growth in the construction sector together with agriculture, mining and quarrying, and transport activities. Tanzania’s current GDP growth rate is 1.04 percent.

The banking sector is regulated by the central bank (BOT), and comprises largely of commercial banks, who extend mortgages and personal loans. The mortgage market in 2019 saw some improvements in the number of mortgage banks, outstanding mortgages and the value of mortgage loans, when compared to 2018. However, COVID-19 slowed down bank activities as banks remained uncertain about lending to retail and small and medium-size enterprises. Banks reported a reduction in profits as interest and non-interest incomes declined. Overall, mortgages only contributed 0.3 percent to GDP in 2019. The use of banking services by the population is also generally low.

The majority of the urban population is reported to be renting their dwellings. Access to affordable and adequate housing shows disparities among households where the dwelling is located and for gender. The price of the cheapest newly built house is TSh180 million (US$78 000), 288m2 and would be a one-bedroom house. Only 2.7% of urban households could afford the cheapest newly built house.

Property markets in urban areas are dominated by the private sector, which has market share of over 75 percent. The government participates in property development mainly through the National Housing Corporation (NHC) or Tanzania Building Agency (TBA), especially in providing social housing, which may be considered risky by the private sector.  There are a number of ongoing projects undertaken by the NHC. The number of houses completed by the NHC in 2019 was approximately 1 459.

There is an acute shortage of accommodation in urban and cosmopolitan areas, mainly due to the rapid growth of economic projects and the population, which has increased demand for residential and commercial properties. The NHC, the TBA and other private firms require synergies that can support property development. Opportunities available include the development and management of housing estates, residential apartments, office buildings, conference and banquet facilities, shopping malls, hotels, and the provision of home financing.

Find out more information on the housing finance sector of Tanzania, including key stakeholders, important policies and housing affordability:


Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2020 edition, which has up-to-date profiles for 55 African countries.

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