Australia's housing crisis has knocked these two cities down in the global liveability rankings

Melbourne and Sydney remain in this year's list of the top ten most liveable cities in the world but have fallen in the rankings due to the housing crisis.

Melbourne is the world's fourth most liveable city, according to the Economist Intelligence Unit's annual global index. Source: Getty / Avalon/Universal Images Group

Melbourne outranks Sydney as Australia's most liveable city, coming in at fourth in the world in this year’s Economist Intelligence Unit's Global Liveability Index. 

The survey looked at 173 cities and assessed factors like stability, healthcare, culture, environment, education and infrastructure. Affordability was not assessed.

Each city was given an index score aggregate out of 100.

Both cities scored full makes for education and healthcare, but Melbourne pulled ahead in the categories of culture and environment, with 95.8 to Sydney's 94.4.

Both cities experienced a decline in their infrastructure score from last year's rankings, due to the shortfall in affordable housing.

Melbourne's fourth-place ranking has dropped one slot from last year, where it was ranked third for liveability. Sydney has fallen from fourth place to seventh, among those surveyed.

Vienna in Austria retained the title of the world's most liveable city for the third consecutive year.

Damascus in Syria remained the world's least liveable city among those surveyed, with particularly low scores for stability and healthcare.

Vienna in Austria was ranked the most liveable city in the world for the third year in a row. Source: Getty / Alexander Spatari

Liveability under pressure

Tel Aviv fell in the rankings most dramatically, from 92nd to 112th, following the start of the Hamas-Israel war.

But Western European cities featured most prominently among the cities with declining rankings.

Five major German cities — Berlin, Munich, Hamburg, Stuttgart and Düsseldorf — were among those that fell most sharply down the ranks, losing points for stability after "increasing incidents of protest" and "policy ranging from agriculture to immigration".

Stability is the measure that has declined most across the entire index.

Russia's invasion of Ukraine has kept Kyiv in the bottom ten.

The report explicitly calls out housing affordability and inflation as factors affecting rankings among Australian and Canadian cities.

According to the Economist Intelligence Unit, global liveability rose "fractionally" over the past 12 months. It said the decline in the stability measurement was offset by improvements in healthcare and education across some European and North American cities.