Million-dollar price tags on a record number of Singapore's public housing sales are a sign the city-state is joining the frenzy gripping property markets from Hong Kong to Toronto.

Twenty-three resold government-subsidized flats were purchased for at least S$1 million ($743,000) in February, a new monthly record, according to data from real estate portal SRX Property. Thirty-six sales in that price bracket were concluded in the first two months of the year, a 350% increase from a year earlier.

Singapore's government-built homes bear little resemblance to low-income urban concentrations in other parts of the world, housing more than 80% of the country's residents. The generally well-maintained flats can be found around the priciest locations such as its famed Orchard Road shopping belt, often returning profits for owners after a five-year holding period.

Prices in the city-state have recovered rapidly from a lockdown that lifted last June as low interest rates prompt buyers to look past a deep economic recession. The pace of gains in public housing may feed through to private property, a sector that drew cooling measures from the government in 2018 and may well do so again.

Curbs on public housing 「could adversely affect the value of the biggest assets of a large majority of the people,」 said Nicholas Mak, the Singapore-based head of research and consultancy at APAC Realty Ltd. unit ERA. 「All the warning shots fired by the government have been aimed at private housing, when prices of resale public flats are going up more.」

To maintain affordability, policy makers focus on the supply of new government-built apartments and sell these at a discount to eligible buyers, he said.

Read: Why Singapore Has One of the Highest Home Ownership Rates

A spacious two-story unit, also known locally as an executive maisonette at Toh Yi Drive, was the most expensive resale public flat last month, fetching S$1.21 million, according to SRX Property. Prices of resale apartments overall climbed 1.4% in February from a month earlier and 8.3% from a year ago, though they remain below a 2013 peak, the data show.

Meanwhile, sales of private apartments have exceeded a two-year high, matching robust activity in real estate markets world-over.

In Toronto, the average price of a home breachedC$1 million for the first time in February, while London's average price shot past£500,000, more than double the national level. In Hong Kong, weekend sales reached an eight-year-high and, in Australia, house prices surged last month by the most in 17 years.

Affordable Homes

Singapore's public housing is open only to citizens and permanent residents, and has been crucial in keeping homes affordable during a decade in which city-dwellers across the world have been increasingly priced out. Owners can sell their flats only after occupying them for a minimum of five years to prevent frequent flipping for a profit.

Public flats that have been sold for S$1 million or more are generally in or near prime locations such as the city’s financial district, said Leonard Tay, head of research at Knight Frank Singapore.

「Home buyers are willing to purchase these well-located public flats at S$1 million for decent quality homes,」 he said. Increased government grants in the last few years have also added purchasing power for those seeking resale public flats, he added.

Unlike the projects in New York or the banlieus of Paris, housing flats in Singapore are generally well-kept. The flats are upgraded twice during the 99-year lease period to maintain the structure as well as the quality of elevators and walkways. Surrounded by manicured greenery, the neighborhoods are fitted with amenities such as sports facilities and food courts, which are periodically updated.

Prices of public housing form the basic foundation for other types of property, said Christine Sun, a senior vice president of research and analytics at OrangeTee & Tie. 「If resale prices of public housing flats continue to rise, then it is highly likely that private home prices may continue to climb in tandem.」