Despite its record high property prices and traffic issues, Auckland has been ranked the world's eighth best city in the latest liveability rankings released by the Economist Intelligence Unit.
Auckland improved one spot from last year, and is now ranked ahead of Helsinki and Hamburg.
Melbourne remains the most liveable of the 140 cities surveyed, followed by the Austrian capital Vienna.
The global liveability survey gave cities a rating which represents the challenges they present to lifestyle of people living there.
The unit scored each city across five broad categories: stability, healthcare, culture and environment, education and infrastructure.
Worldwide terrorism continued to shake up stability, the report said.
"Sydney, for example, has fallen by four places, to move out of the 10 most liveable cities, owing to a heightened perceived threat of terrorism," it said.
"Those cities moving up the ranking are located largely in countries that have enjoyed periods of relative stability."
US cities are among those that had seen a drop in scores, and Paris also saw a sharp decline in its ranking because of the mounting number of terrorist attacks over the past three years.
The report noted that the world's biggest cities were not ranked highly and tended to be "victims of their own success".
"New York, London, Paris and Tokyo are all prestigious hubs with a wealth of recreational activity, but all suffer from high level of crime, congestion and public transport problems than are deemed comfortable," said the report.
Damascus, Syria's capital, was ranked as the least liveable city in the world.
Top 10 most liveable cities
Auckland, New Zealand
(source: The Economist Intelligence Unit)