Auckland has the world's fourth-best quality of living, according to a new ranking dominated by European cities.

But in another ranking for eco-cities, Wellington beats out Auckland, ranking fifth worldwide.

In both categories, New Zealand cities sit at the top of the Asia Pacific, ahead of Australian contenders.

The 2010 Mercer Worldwide Quality of Living Survey was released today, ranking cities for overall quality of living based on political, socio-economic and environmental criteria as well as sanitisation, education and transport. The company also compiled a list of top eco-cities.

Spokeswoman Georgina Harley said in a statement to media that New Zealand cities had been recognised for having "quality housing close to the city", "political stability" and "transport".

Ms Harley also praised New Zealand cities' "wide selection of restaurants".

Auckland ranked fourth while Wellington was judged 12th worldwide for quality of living.

Among eco-cities, Wellington was fifth while Auckland was deemed 13th.

Baghdad, Iraq, was judged to have the worst quality of living among surveyed cities, while Port-au-Prince, Haiti, ranked at the bottom of the eco-city rankings.

The rankings are compiled to help businesses determine "hardship" allowances for employees abroad, based on the quality of life of the cities they live in.

Mercer senior researcher Slagin Parakatil said cities no longer had to be in near economic powerhouses to attract business.

"As the world economy becomes more globalised, cities beyond the traditional financial centres are emerging as attractive places in which to expand or establish a business," Mr Parakatil said.

An eco-city optimised its use of renewable energy sources and generated the lowest possible quantity of pollution, he said.

Global ranking
Quality of life:

1: Vienna, Austria
2: Zurich, Switzerland
3: Geneva, Switzerland
4=: Auckland
4=: Vancouver, Canada
6: Dusseldorf, Germany
7=: Frankfurt, Germany
7=: Munich, Germany
10: Sydney, Australia
11: Copenhagen, Denmark
12: Wellington

Eco-city ranking:

1: Calgary, Canada
2: Honolulu, United States
3=: Ottawa, Canada
3=: Helsinki, Finland
5: Wellington
6: Minneapolis, United States
7: Adelaide, Australia
8: Copenhagen, Denmark
9=: Kobe, Japan
9=: Oslo, Norway
9=: Stockholm, Sweden
12: Perth, Australia
13: Auckland

Asia Pacific
Quality of living:

1: Auckland (4th overall)
2: Sydney (10th)
3: Wellington (12th)
4: Melbourne (18th)
5: Perth (21st)

Eco-city ranking:

1: Wellington (5th overall)
2: Adelaide (7th)
3: Kobe (9th)
4: Perth (12th)
5: Auckland (13th)