Hundreds of homes were destroyed after a fire ripped through a coastal village in Malaysia on Thursday.

More than 700 wooden properties were razed in a floating community of stilt houses of Kurnia Jaya Village in Tawau City, Sabah State on March 17.

Firefighters rushed to the scene to rescue trapped families by boat as seen in footage taken by one of the villagers showing heartbroken fire survivors hugging their families as they watched their homes turn to ashes.

Fire volunteers then spent five hours before the blaze was controlled around 9 p.m. No one was reported hurt in the incident while the total damage on properties has yet to be estimated.

Tawau Fire and Rescue Department chief Julius John Stephen said: 'We had to seek assistance from fire marshalls from other towns to quickly put out the blaze.

'The fire was under control at 9 p.m. but the brigade had to continue with safety checks in the area until later. No casualties have been reported while the cause of the fire and amount of damages are under investigation.'

The flames quickly spread throughout the community as the houses were made from light materials such as wood and plastic.

Sabah Fire and Rescue Agency official Misran Bisara said the villagers, who reportedly occupied the area without permits, would stay at the evacuation centre until housing assistance is extended.

He said: 'The affected families were informal settlers and would be staying at the evacuation centre until they would be given housing assistance.'

The cause of the fire is still under investigation.