Consumer confidence in Australia is far higher in the rural areas than those in the urban parts these past two to three months. This has been revealed in the the Westpac-Melbourne Institute consumer sentiment index published today.

Westpac chief economist Bill Evans described it as a ''fairly predictable, yet lacklustre result,'' as the consumer sentiment index rose from 104.1 in March to 105.3 in April.

Mr Evans said that this is the first time in two years that those living in the outskirts of cities are more optimistic of the future compared to city folks.

The survey found the confidence of people in rural and regional areas was up 12.2 percent.

''That was probably due to rising prices for soft commodities including beef, wheat, lamb and cotton and extensive rainfall in eastern Australia,'' he said.

''The confidence index for metropolitan respondents fell by 4.6 per cent. This most likely points to the greater importance in the cities of those factors we believe are weighing on households: high debt levels, fragile house prices, sharp increases in interest rates over the last year or so, and rising health, utility and education costs.''

He said the index for the metropolitan areas was below that of the non-metropolitan index for the first time since August 2009.

In a related report of Canberra Times, it said in an interview with CommSec chief economist Craig James that consumers were more fixated on perceptions rather than on reality.

Mr James said that it has to be noted that according to the Australian Bureau of Statistics figures published yesterday private sector wealth even went up by 1.3 percent to a record $6 trillion as of end-December 2010.

He noted that this could mean that an additional $2600 has been added to the income every person over the quarter.

''For most, the perception is that they are going backwards the cost of living is rising, incomes aren't keeping up and wealth levels are stagnating. But the reality is that incomes continue to grow at a faster pace than prices while balance sheets are improving through record wealth levels and reduced debt levels,'' Mr James said as quoted by the Canberra Times.