Consumer confidence is on the rise, with the ANZ-Roy Morgan New Zealand Consumer Confidence Index sitting well above average as the nation heads into the Christmas period.

The December index was 126.5, compared with 121.8 in November, and the long term average of 118.8.

The Current Conditions Index, an indicator of spending trends, and the Future Conditions Index lifted during December.

Seasonally adjusted estimates were also increased.

There were increases in the five subcategories of the index.

Compared with a year ago, households feel better off financially.

It is also considered a good time to buy a major household item, and three of the forward-looking indicators of expectations of the economy at one and five years, and wealth, were all moving in a positive direction.

The report stated several reasons for the increase in confidence, including firmer house prices, falling mortgage rates, lower petrol prices, strong employment prospects, and low inflation.

The Composite Confidence gauge indicates growth of four per cent plus.