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Can I Buy a HDB Shophouse with Attached Residential Quarters?

commercial property purchase


With so many new regulations coming up in short spans of time, many people are confused.

You would normally associate HDB with residential flats. However HDB also has shophouse units which are considered commercial properties. These commercial properties are normally located with town councils or town centres near hawker centres.

buy hdb shophouse residential quarters
Image credit: CBRE

Some of these HDB shophouses contains residential quarters.

Due to these residential quarters within the HDB shophouses, this has caused a lot of confusion as to where they are considered HDB flats or partial HDB flats (apportioned by the size of the unit).

What if you already own a private property, can you buy a HDB shophouse commercial unit that also happens to have a residential dwelling?

Apparent if we go by the HDB rules that applies on HDB flats, then you cannot buy a HDB shophouse if you already own a Private property.

Say for example the HDB shophouse is 1600 sq feet made up of 2 floors.
— 800 Sq feet on 1st floor and
— 800 sq feet of residential unit on the second floor.

If you have NO outstanding housing loan, then the bank will consider to lend you 80% of the valuation for the property. However, if you have any existing home loan, some banks are considering: –

— Lending you 80% on the commercial portion of the HDB shophouse of 800 sq feet
— Lending you 60% on the residential portion of the HDB shophouse of 800 sq feet

Apparently some Singapore banks are still checking with MAS with regards to the treatment and classification of such property. As these properties typically have quite a number of regulations attached to it’s ownership and business use, they can be risky both for the property buyer as well as the banks who lends money out on these type of properties.

So we decided to check with HDB on how they Classify HDB shophouses

—————————- Original Message —————————-
From: ”Yit Hah LEE” >>
Date: Fri, October 21, 2011 6:40 pm
To: Property Buyer Mortgage Consultant


Your Ref :
Our Ref :
Date : 21 Oct 2011
TEL : 1800-8663073
FAX : 63972477/8


Dear xxxxx,


We refer to your email of 19 Oct 2011.

2 Please be informed that although some HDB commercial
properties have living quarters attached to them, these properties are
sold or tenanted out as a commercial property under a single title and
deemed as non-residential. The prevailing policy that persons who buy
non-subsidized flats are not allowed to concurrently own an HDB flat and
private property within the minimum occupation period is applicable only
to private residential property.

3 We have also no restriction for foreigner/ Singapore
Permanent Resident to purchase HDB commercial shops (i.e. shop with living
quarters at 2nd storey or shop without living quarters) provided the
individual(s) are above 21 years of age and is not an undischarged

4 You may visit our website at>
Commercial Tenants & Lessees > Managing your sold premises. There is
more general information on the procedure; policies for Resale/
Transfer of Shop. Alternatively, you can call our toll-free enquiry
hotline at 1800-8663073

Yours faithfully



We are thankful to Ms. Lee of HDB for her fast response to clarify the issue of HDB shophouses.

Even though this property is treated as Commercial, many of these properties have maybe between 40 plus years to 70 plus years of remaining leases as most HDB shophouses were older designs built in the 1970s onwards.

Will there be racial quota?

We can’t help but wonder what would be the racial quota of these shophouses on the residential units?
How many people can stay in it?

Banks are generally only lending to HDB shophouses with a minimum of 60 years of remaining lease. The maximum tenor of the loan is capped by (Remaining lease – 30 years). This is not a rule set in concrete or by regulation, but a rule that banks normally apply.

Property Buyer’s advice

If for any reason HDB shophouses come in at the cheaper range of the price range, this can best be explained by the possible ambiguity of investing in such category of properties. Investors fear uncertainty and generally apply a discount to uncertainty. Banks similarly may impose either a longer processing time or some conditions on lending on such property, or stay away completely.

The value of this investment will very much depend on the Singapore regulatory environment governing this type of housing as well as credit availability or restrictions at the point of sale. Else this asset will be purely a yield play without too much excitement on capital gains.

As trading volume is rather thin, you could very easily pick a gem as well as a lemon.

For advice on a new home loan.

For refinancing advice.

Download this article here.

Written by Paul Ho

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