Listed retirement business Summerset Group, due to release its half-year result tomorrow, is looking to cash in on Auckland's fast-rising house prices, according to an analyst's report.

Jeremy Simpson of Forsyth Barr noted how Auckland was a big target market for expansion of the business run by chief executive Julian Cook.

"Summerset is continuing to rapidly sell down its new villages at Karaka and Hobsonville and is building at Ellerslie and planning villages at its St Johns and Parnell sites. Potential residents looking to sell houses in those areas have enjoyed a significant increase in house values which provides a level of protection from any housing market weakness. Also the apartment style nature of these villages means that average selling prices are likely to be below average house prices," Simpson said in a report on the business.

"Summerset's new villages have a higher level of 'needs based' product than its overall portfolio giving newer villages some defensive qualities. SUM also has a low level of exposure to Auckland with its only fully established village to date being it's Manukau village," he noted.

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Analysts at Craigs Investment Partners were also upbeat about Summerset.

Stephen Ridgewell, Chris Byrne and Joshua Dale upgraded the stock to a buy partly due it a conviction that the business had a "sound development strategy (including location within Auckland, pricing, product and execution) that will support higher new sales volume and margins," they said in a report.

Summerset's existing portfolio was also showing clear signs of resale maturity, "which will help drive resale volume growth," they said.

House prices in the regional North Island where Summerset had 53 per cent of its portfolio were also showing clear signs of strength after five years of
very little growth, which will boost resale margins from levels that are currently well below peers, they noted.