Top Real Estate Trends of 2025

The real estate landscape in 2025 is characterized by a mix of recovery, strategic adjustments, and the increasing influence of global and local factors. Both internationally and within Zambia, certain trends are emerging as key drivers for the market.

1. Continued Growth in Residential Real Estate, Driven by Urbanization and Middle-Income Demand

Globally and in Zambia, the residential sector remains a strong focus. Rapid urbanization, particularly in African cities like Lusaka, is fueling a significant demand for housing.

Zambia’s real estate market is experiencing a surge in demand for residential properties. This growth is largely attributed to the expanding urban population and the need for modern housing solutions. There’s a particular emphasis on the middle-income residential market, with a strong self-build trend where Zambians purchase plots and construct homes over several years. Developers are also increasingly aware of the affordability gap and are striving to provide value-for-money housing.

2. Increased Investment Activity and Market Stabilization

After periods of uncertainty, the global real estate market is showing signs of stabilization and increased investment activity. Investors are re-engaging, moving from a “wait and see” approach to a more disciplined re-entry.

Zambia’s recovering economy and investment-friendly policies are attracting both local and international investors. Forums like ZAMREAL 2025 are bringing together industry players to discuss investment opportunities, particularly in light of economic stabilization efforts, including a deal with overseas creditors. The mining sector’s resilience and improved agricultural performance also contribute to a positive outlook.

3. Focus on Infrastructure Development and its Impact on Property Values

Government-driven infrastructure investments are playing a crucial role in unlocking real estate potential, especially in emerging markets.

Infrastructure projects, such as road expansions (e.g., the Lusaka to Ndola dual carriageway) and the development of new commercial hubs, are enhancing Lusaka’s appeal as a prime location for real estate investments. These improvements boost demand in areas further away from city centers, as accessibility improves.

4. Rising Importance of Sustainability and Technology (PropTech)

Environmental, Social, and Governance (ESG) considerations, alongside technological advancements, are increasingly influencing real estate decisions.

While still developing, there’s a growing recognition of sustainable building practices. The Zambia Green Jobs Programme aims to promote the economic benefits of green building and construction.

5. Navigating Regulatory Changes and Financial Challenges

While opportunities abound, the real estate market in 2025 also presents challenges, particularly concerning regulations and financing.

A significant change for 2025 is the Property Transfer Tax (Amendment) Act, 2024, which increased the tax rate to 8% of the realized value for land transactions. This is expected to raise transaction costs, potentially slowing property purchases and putting pressure on prices, especially in urban residential markets. High mortgage interest rates (ranging from 6.5% to 30% annually) continue to be a barrier to homeownership for many. The proposed de-dollarization in favour of using the Kwacha is another critical topic being discussed, which could impact pricing and investment strategies.

2025 for real estate, particularly in Zambia, is a year of cautious optimism. While economic recovery and urbanization are driving growth in the residential and commercial sectors, navigating regulatory changes, financing challenges, and embracing sustainability and technology will be crucial for success.