Zambia's residential market is growing with its emerging middle class; however, much needed social housing is still an issue for the government.

At around a 3% per annum growth rate, Zambia's population is on the rise, and so is the shift to urban areas, such as the capital city Lusaka. The result is that Zambia has a serious residential housing shortage. As of 2002, Lusaka's total housing stock stood at 300,000 units, but of that number only 10% were formal dwellings, while the other 90% consisted of densely packed informal or slum accommodations, according to the World Bank. At the time, the government assessed that over 150,000 new housing units were required for Lusaka alone, which had a population of just over 1 million, and now has 3.1 million inhabitants needing to be housed. Prior to that in 1996 the government set out its findings relating to social housing in its National Housing Policy Document. The report identified the need for over 860,000 new housing units to be built in Zambia with a goal of 110,000 units a year. Fast-forward to 2011, and the government announced its intention to build a mere 12,000 housing units, with a mixture of low-, medium-, and high-cost houses included in the plan. It hoped to execute this housing initiative through public-private partnerships (PPPs), according to a report in African Review. In short, the social housing crisis is not going away for Zambia because although it has the land to build social housing, the government is struggling to find the funds to solve the problem on its own. And this is not an issue restricted to the capital city. The Northwestern and Copperbelt provinces also urgently require housing stock in large numbers for the mining workers in those regions. As the copper industry grows, a number of international mining operators are stepping into the breach and providing company housing to ease the situation for their workforce.

Zambia's defense forces have, however, benefited from a government-housing program. Under this initiative, by December 2013, 4,336 new low- and medium-cost housing units were built and handed over to various Army, Air Force, and National Service units around the country, according to the Times of Zambia.

In the Zambian private housing market, the average price per square meter to buy an apartment is $900 in the city center, and $1,500 outside the city center, based on nationwide data as at September 2014 (Numbeo Market Reports). This reflects the trend for new upmarket developments located away from city centers. Knight Frank, in its 2013 Africa Report note, that there is also a strong demand for stand-alone houses and a continuing shortage of high-end housing in general in Zambia. In terms of purchasing power, the average urban monthly disposable income (from salary) after tax is $3,964.79, and the average annual mortgage interest rate is 16.33% in Zambia as of 1H2014.

Joseph M. Chikolwa, the Managing Director of Zambia National Building Society (ZNBS) told TBY, “ZNBS is now focused on giving mortgages to members of the public to build houses or buy from various developers." The bank, which has a 70% share of the mortgage market, has seen annual growth of around 17% in the lending sector. Not surprisingly, at the moment in Zambia the main borrowers tend to be government employees, who as part of the growing middle class want to get onto Zambia's property ladder.

At the higher end of the residential market there are a number of new developments occurring, such as Roma Park, which is 6 kilometers from Lusaka city center and is a mixed residential and commercial/industrial scheme. On completion of the five- to seven-year development it is expected that investments will exceed $100 million. As of 2012, prices for residential units ranged from $25 to $40 per square meter according to Pam Golding Properties (PGP), one of the companies marketing both residential and commercial units for Roma Park. Developments such as this are looking to target both the growing interest in gated or secure housing parks and the need Zambia has for more light industry, commercial, and retail facilities.

In the rental market, a one-bedroomed city center apartment currently costs $739.74 per month on average across Zambia's cities, while outside the city center the rental price goes down to $414.74. A three-bedroomed apartment in the city center is going for $1,662.82 on average, and outside the city center the rental cost is $1,100 per month average (September 2014 Numbeo Market Reports statistics).


In Jones Lang LaSalle's (JLL) 2014 Global Real Estate Transparency Index, Zambia was named one of the top 10 countries showing the greatest improvement in commercial real estate market transparency. This was alongside its African neighbors, Kenya, Nigeria, and Ghana. A growth in transparency goes hand-in-hand with increased FDI in a country's commercial real estate, as previous recipients of this most-improved award have experienced, including Turkey, Mexico, and South Korea. Additionally, the World Bank ranked Zambia ninth out of 51 countries in Africa, in its Ease of Doing Business Index 2013. This is clearly a significant moment for Zambia's commercial property segment; one that it needs to capitalize on while it has the global market's confidence. Prime retail rents are sitting at $35 per sqm per month with a yield of 10% (2013 figures). By comparison in Angola retail rents for the same year were $120 per sqm per month, but the prime yield was 10%, no different from the figure achievable in Zambia. In 2012, a total of 33,000 sqm of retail space was built in Lusaka, according to Inutu Zaloumis of Pam Golding Properties, as reported in Property24.

In the retail segment, the construction company Flame is currently involved in the Nkana Mall development in Kitwe. Mohamed Salama, CEO of Flame, told TBY in his recent interview that, “This is a $25 million project that will allow the developer to gain a significant market share with this mall." The footprint is around 22,000 sqm with provision in the plans for retail shops, a cinema complex, hypermarket, cafes and restaurants, and underground parking.


Zambia currently has a shortage of high-quality office stock built to the specifications expected by international occupiers, according to Knight Frank's Africa Report 2013. This has created a market favorable to landlords with new office space being taken up with very little time lag. For example, speculative developments, such as Trinity Park in Lusaka, have generally been leased within three to four months of completion, according to Knight Frank. Having said that, prime office rents in Lusaka are at $20 per sqm per month, considerably lower than the $85 per sqm per month for office space in Lagos, Nigeria. The yield value for Zambian office space stands at 11%. In 2012, 10,000 sqm of office space were added in Lusaka, as reported in Property24.


The industrial and warehousing segment of the real estate market is still under supplied and a general lack of transport, ICT, and general services infrastructure is hampering growth in this area. Industrial rents are at $5 per sqm per month, but the prime yield is 13%, (Knight Frank figures 2013). By way of comparison, Angola's prime industrial rents stand at $15 per sqm per month, but with a lower yield than Zambia at 12%.