A real estate development project is under construction when it has broken ground. For clarity, “broken ground” means that excavation work has begun (the site being cleared of plants and debris is not proof that construction is underway).
Projects enter the real estate pipeline when they receive building permits. The next stage in the pipeline is when projects are under construction. The pipeline is important as it helps us project the supply of real estate.
New construction is the most critical and important supply concept driving real estate markets.
The term new construction refers to completions. The new supply of real estate has three stages, commonly referred to as the “pipeline.” These are marked by three project milestones:
1. Permit (or pipeline entry): the development receives the permit or permission of the authorities based on approved plans.
2. Start or startup of construction, which usually means that “shovels are in the ground” but can be more complicated.
3. Completion: the property is given occupancy certification
