With the rapid development after the Second World War, Kota Kinabalu has begun to shine as the capital town of Sabah. Since then, several housing estates have cropped up to accomodate the fast growing population. This dissertation is principally concerned with the general residential area that is found in Kota Kinabalu. It covers low, middle and high income-level housing plus squatter areas. It is the purpose of this dissertation to study the various residential areas in relation to it's locational and housing choices, that is, from an economic viewpoint, as well as the many facilities, amenities and utilities that exist in the area. This lies upon a comprehensive study on Kota Kinabalu and shall link various factors like population with reference to religious and racial compositions, age and sex groups, and so forth upon the existing residential areas and it's need for various facilities to satisfy its' residents. Then a further analysis on the trend of property values in a specific area in Luyang will help complete the study. The main area of study stretches from Tanjung Aru to the Likas area, in the form of a sector including the Luyang area. This dissertation is divided into four parts. The first part includes an introduction to Sabah and subsequently Kota Kinabalu. Then the historical background of Sabah with reference to Kota Kinabalu is outlined to give a picture of early settlements during pre-war and post-war periods. The following chapter in this part is concerned with the present and proposed urban development in Kota Kinabalu. The housing situation is also mentioned here, that is, the provision of housing for the different income level groups and squatter areas. The general study area sector, that is from Tanjung Aru to Likas will be introduced in the second part. The chapters here are based on this area. In the first chapter the relevant factors of residential location as well as the factors on housing choice are discussed to explain why and where the residential areas grow and are provided for. In the following chapter, an analysis is done upon the existing data on population as mentioned earlier. This social survey will decide the need for various facilities to cater for the society. Then a further study on existing public services, utilities and facilities are done to complement the study of the residential areas. In the third part, the specific study area narrowing down to Luyang Phases 1-5, is introduced and outlined in detail. The trend in both Capital and Rental values over a period of five years is analysed and factors responsible for this trend are also accounted for. Lastly, a conclusion is arrived at in the fourth part which includes the author's suggestions on the problems of the residential areas.