For many Malaysians, Sabah means one thing: Vacation.

Golden sunsets at Tanjung Aru. Island hopping in clear blue waters. Fresh seafood by the waterfront. Mount Kinabalu rising in the background.

But Kota Kinabalu is no longer just a travel destination.

Behind its relaxed image, structural economic changes are happening. Tourism growth, airport connectivity, infrastructure upgrades and housing development are aligning.

And when tourism, infrastructure and property demand move together, markets evolve.

This is where Kota Kinabalu property investment starts entering serious conversations.

---

Key Takeaways:

• Kota Kinabalu tourism growth is strengthening rental demand.
• RM 6.9 billion allocated to Sabah supports infrastructure upgrades.
• City-centre condo prices averaging RM400–RM700 psf remain competitive.
• Peak occupancy of 70–80% and 5–7% yields indicate measurable performance.
• The city appears to be in an earlier property market cycle compared to Penang

---

---

Is Kota Kinabalu More Than Just a Travel Destination?

Kota Kinabalu, or KK, is the capital of Sabah in East Malaysia. It is the gateway to island tourism, marine parks and Mount Kinabalu.

What makes Kota Kinabalu different from other Malaysian cities?

• An urban city centre
• Island access within 15–20 minutes
• Mountain and eco-tourism
• Diving and marine parks
• Cruise arrivals
• Strong food and lifestyle culture
  

Very few Malaysian cities combine city living and island proximity this closely.

Cities built on experience tend to attract repeat visitors. Repeat visitors create steady demand for accommodation. Steady demand supports property performance.

Unlike Kuala Lumpur or Penang, Kota Kinabalu property prices have not fully priced in its tourism positioning.

Tourism Growth Is Supporting Property Demand In Kota Kinabalu

Tourism in Sabah has long been important, but what is different today is alignment.

The federal government has allocated RM 6.9 billion to Sabah, focusing on:

• Transport upgrades
• Public facilities
• Tourism infrastructure
• Urban improvements

When infrastructure improves, property demand often follows with a delay.

This timing gap is important for investors.

Tourism Foundation Snapshot

Factor	Why It Matters for Property Investors
Transport upgrades	Easier visitor movement
Urban redevelopment	Better city centre appeal
Tourism infrastructure	Supports rental occupancy
Government focus	Long-term growth direction

Markets grow when policy, infrastructure and demand align. Kota Kinabalu is beginning to show that alignment.

The Airport Effect: Connectivity as a Growth Driver

Kota Kinabalu International Airport is Sabah’s main entry point. Nearly every tourist and business traveler passes through it.

It connects KK directly to:

• Kuala Lumpur
• Singapore
• Key regional Asian cities
• Major East Malaysian towns
  

Historically, airports act as economic signals. When passenger movement increases, accommodation demand usually follows.

Infrastructure often improves before property prices adjust.

For investors, understanding this sequence is critical

Rental Performance and Yield Reality In Kota Kinabalu

Let’s talk numbers.

In the Kota Kinabalu property market, well-located units have shown:

• 70–80% peak occupancy rates
• 5–7% estimated net annual yields
• RM40,000–RM70,000 annual rental income for strong-performing units
  

However, returns depend heavily on:

• Location within the city
  
• Building approval for short-term rental
  
• Layout efficiency
  
• Management quality
  

Investors targeting the city centre, Jesselton and waterfront zones typically see stronger demand due to tourist foot traffic.

In tourism-driven markets, convenience and accessibility matter more than unit size.

The key principle: Selection drives performance, not speculation

Kota Kinabalu vs Penang vs Langkawi: A Practical Comparison

Investors comparing Kota Kinabalu property investment often look at Penang and Langkawi.

Penang is a mature tourism and heritage market. Property prices are higher, and much of its growth is already reflected in values.

Langkawi is strongly leisure-driven, focused on resort and seasonal tourism.

Kota Kinabalu offers a different balance:

• Urban city centre with daily activity
  
• Direct access to islands and marine tourism
  
• Competitive entry prices
  
• Moderate short-term rental competition

Factor	Kota Kinabalu	Penang	Langkawi
Market Stage	Emerging	Mature	Tourism-Focused
Avg Condo Price	RM400–RM700 psf	RM500–RM900 psf	RM450–RM800 psf
Growth Potential	Higher	Moderate	Moderate

For investors, the difference is simple.

Penang offers stability.
Langkawi offers resort appeal.
Kota Kinabalu offers earlier-cycle positioning with tourism-driven property demand.

Markets that are not yet fully priced often present stronger medium-term upside.

Property Prices, Urban Growth and Market Cycle

The Kota Kinabalu property market remains competitively priced, with many city-centre units averaging RM400 to RM700 per square foot. Compared to Kuala Lumpur and Penang, this suggests Kota Kinabalu is still in an earlier growth phase.

Lower entry prices offer:

• Smaller capital commitment
• Better downside protection
• More room for gradual appreciation

At the same time, waterfront upgrades, mixed-use projects and serviced apartments are reshaping the city core.

Property markets usually move in stages:

Infrastructure upgrades → Developer activity → Price recognition.

Kota Kinabalu appears to be in the middle stage — where fundamentals are strengthening but prices remain moderate.

That positioning often attracts early-cycle investors.

What Smart Investors Should Evaluate

Emerging markets require discipline.

Before investing in Kota Kinabalu, investors should review:

• Strata regulations and short-term rental approval
• Building management standards
• Long-term maintenance quality
• Proximity to transport and tourist hubs
• Upcoming development plans
  

Location remains critical. Areas near the city centre and waterfront, particularly Jesselton, continue to attract attention due to accessibility and tourist flow.

A strong investment is built on consistent demand, not short-term excitement.

Balanced growth is healthier than rapid price spikes.

Final Thoughts: Is This the Right Time to Look East

Kota Kinabalu is slowly moving beyond its image as just a tourist destination. With RM6.9 billion allocated to Sabah, stronger infrastructure and steady tourism demand, the fundamentals are becoming clearer.

The Kota Kinabalu property market is still reasonably priced compared to more mature cities. At the same time, urban upgrades and new developments show growing long-term confidence.

The key question is simple.

Is this the moment before broader market recognition?

For investors willing to look beyond Kuala Lumpur and Penang, Sabah may offer an earlier-stage opportunity backed by tourism growth and improving connectivity.

Sometimes, the quieter markets tell the stronger long-term story.

FAQ

---

Considering Kota Kinabalu property investment? Leave your details and an IQI advisor will help you evaluate the market and next steps.

Full Name:

Location:
Select your location JohorKedahKuala LumpurMelakaNegeri SembilanPahangPenangPerakPerlisSabahSarawakSelangorTerengganu AfghanistanAlbaniaAlgeriaAmerican SamoaAndorraAngolaAnguillaAntarcticaAntigua and BarbudaArgentinaArmeniaArubaAshmore and CartierAustraliaAustriaAzerbaijanBahrainBaker IslandBangladeshBarbadosBassas da IndiaBelarusBelgiumBelizeBeninBermudaBhutanBoliviaBonaireBosnia and HerzegovinaBotswanaBouvet IslandBrazilBritish Indian Ocean TerritoryBritish Virgin IslandsBrunei DarussalamBulgariaBurkina FasoBurundiCambodiaCameroonCanadaCape VerdeCayman IslandsCentral African RepublicChadChileChinaChristmas IslandClipperton IslandCocos (Keeling) IslandsColombiaComorosCongo, Democratic Republic of theCongo, Republic of theCook IslandsCoral Sea IslandsCosta RicaCote d'IvoireCroatiaCubaCuracaoCyprusCzech RepublicDenmarkDjiboutiDominicaDominican RepublicEast TimorEcuadorEgyptEl SalvadorEquatorial GuineaEritreaEstoniaEthiopiaEuropa IslandFalkland IslandsFaroe IslandsFijiFinlandFranceFrench GuianaFrench PolynesiaFrench Southern and Antarctic LandsGabonGaza StripGeorgiaGermanyGhanaGibraltarGlorioso IslandsGreeceGreenlandGrenadaGuadeloupeGuamGuatemalaGuernseyGuineaGuinea-BissauGuyanaHaitiHeard Island and McDonald IslandsHoly SeeHondurasHong Kong (SAR)Howland IslandHungaryIcelandIndiaIndonesiaIranIraqIrelandIsle of ManIsraelItalyJamaicaJapanJarvis IslandJerseyJohnston AtollJordanJuan de Nova IslandKazakhstanKenyaKingman ReefKiribatiKuwaitKyrgyzstanLaosLatviaLebanonLesothoLiberiaLibyaLiechtensteinLithuaniaLuxembourgMacau (SAR)MadagascarMalawiMalaysiaMaldivesMaliMaltaMarshall IslandsMartiniqueMauritaniaMauritiusMayotteMexicoMicronesia Federated States ofMidway IslandsMoldovaMonacoMongoliaMontenegroMontserratMoroccoMozambiqueMyanmarNamibiaNauruNavassa IslandNepalNetherlandsNetherlands AntillesNew CaledoniaNew ZealandNicaraguaNigerNigeriaNiueNorfolk IslandNorth KoreaNorth MacedoniaNorthern Mariana IslandsNorwayOmanPakistanPalauPalestineOccupiedPalmyra AtollPanamaPapua New GuineaParaguayPeruPhilippinesPitcairn IslandsPolandPortugalPuerto RicoQatarRéunionRomaniaRussiaRwandaSaint BarthélemySaint HelenaSaint Kitts and NevisSaint LuciaSaint Martin (French part)Saint Pierre and MiquelonSaint Vincent and the GrenadinesSan MarinoSão Tomé and PríncipeSaudi ArabiaSenegalSerbiaSerbia and MontenegroSeychellesSierra LeoneSingaporeSint MaartenSlovakiaSloveniaSolomon IslandsSomaliaSouth AfricaSouth Georgia and the South Sandwich IslandsSouth KoreaSouth SudanSpainSpratly IslandsSri LankaSudanSurinameSvalbard and Jan MayenSwazilandSwedenSwitzerlandSyriaTaiwan ChinaTajikistanTanzaniaThailandThe BahamasThe GambiaTogoTokelauTongaTrinidad and TobagoTromelin IslandTunisiaTurkeyTurkmenistanTurks and Caicos IslandsTuvaluUgandaUkraineUnited Arab EmiratesUnited KingdomUnited StatesUnited States Minor Outlying IslandsUruguayUzbekistanVanuatuVenezuelaVietnamVirgin Islands (US)Wake IslandWallis and FutunaWest BankWestern SaharaWestern SamoaWorldYemenYugoslaviaZaireZambiaZimbabwe

Email:

Phone Number:

+60

Please select at least one interest.

I want to (Investor)
Invest
Buy
Sell

I give my consent to share my information to submit this form. For more details on our data practices, please refer to our Privacy Policy.
I want the latest property updates, marketing emails, and newsletters from IQI Global by subscribing to IQI Global mailing list

Submit

Continue Reading:

• Sabah’s Housing Boom: How It Became More Than Just ‘Tourism Spot
• Kota Kinabalu: IQI Global’s New Step
• Juwai IQI: Sabah’s property mart to rebound next year

References:

• Airbtics. (2025). Annual Airbnb revenue in Kota Kinabalu, Malaysia. https://airbtics.com/annual-airbnb-revenue-in-kota-kinabalu-malaysia/
• Christopher Elliott. (2025, September 20). In Kota Kinabalu, a fragile balance between sustainability and tourism. Forbes. https://www.forbes.com/sites/christopherelliott/2025/09/20/in-kota-kinabalu-a-fragile-balance-between-sustainability-and-tourism/
• Daily Express. (2026, February). Kota Kinabalu to soon have longest waterfront. https://www.dailyexpress.com.my/news/271868/kota-kinabalu-to-soon-have-longest-waterfront
• STAah Blog. (n.d.). 10 reasons why I love Kota Kinabalu. https://blog.staah.com/featured/10-reasons-why-i-love-kota-kinabalu
• The Borneo Post. (2026, February 16). Stronger ringgit and its impact on Malaysia and Sabah. https://www.theborneopost.com/2026/02/16/stronger-ringgit-and-its-impact-on-malaysia-and-sabah/
• The Star. (2025, April 7). Bangkuai calls for more tourism investments in rural Sabah. https://www.thestar.com.my/news/nation/2025/04/07/bangkuai-calls-for-more-tourism-investments-in-rural-sabah
• The Star. (2025, July 4). Sabah attracts growing interest from Kazakhstan in tourism and business. https://www.thestar.com.my/news/nation/2025/07/04/sabah-attracts-growing-interest-from-kazakhstan-in-tourism-and-business
• The Vibes. (n.d.). KK airport drives Sabah’s tourism, business and trade growth. https://www.thevibes.com/articles/news/115457/kk-airport-drives-sabahs-tourism-business-and-trade-growth
• Tourism Malaysia. (2025, June 25). Tourism Malaysia unveils “Explore Sabah” campaign to boost visitor arrivals to the state. https://www.tourism.gov.my/media/view/tourism-malaysia-unveils-explore-sabah-campaign-to-boost-visitor-arrivals-to-the-state-1