|Dhaka, along with Harare and Port Moresby, is at the bottom of the list as one of the worst cities to live in [EPA]
Melbourne has edged out long-time front-runner Vancouver to be rated the world's most livable city.
The Australian metropolis topped the Economist Intelligence Unit's global livability survey of 140 cities, ahead of the Canadian city which dominated the rankings for almost a decade but is now third behind Vienna, the Austrian capital.
Australian cities featured prominently in the top 10, with Sydney ranked sixth and Perth and Adelaide in joint eighth place, according to the survey, which is conducted twice a year.
Canada also did well, with Toronto and Calgary holding fourth and fifth places respectively. Helsinki in Finland (seventh) and New Zealand's Auckland (tenth) rounded out the top 10.
Cities were scored on political and social stability, crime rates, access to quality health care, cultural events, the environment, education and the standard of infrastructure.
"Australia, with a low population density and relatively low crime rates, continues to supply some of the world's most livable cities," said survey editor Jon Copestake.
"Despite the rising cost of living, driven by the strong Australian dollar, these cities offer a range of factors to make them highly attractive."
Among other well-known cities, Paris came 16th, two places ahead of Tokyo. The top-ranked US city was Honolulu which came 26th, while London was a lowly 53rd, just behind Singapore.
Against the strong performance of Australian and Canadian cities, other parts of the world saw their rankings affected by austerity measures and unrest.
The Greek capital Athens dropped five places to 67th due to recent government cutbacks and protests.
The Arab uprisings prompted a fall in livability for affected cities in the Middle East. This was most pronounced in Tripoli, where the descent into civil war saw its ranking plummet from 107th to 135th.
Harare, Dhaka and Port Moresby, the capitals of Zimbabwe, Bangladesh and Papua New Guinea respectively, were at the bottom of the list as least livable.