A University of Auckland spokesperson said they were disappointed with the drop.
"Our total score in the THE system dropped by only a small amount, from 53.4 to 52.6, but because of the large number of universities with scores close to that figure, that was sufficient to push us down the rankings.
"Over the last decade, the general trend for New Zealand universities has been for their rankings to decline. We are not exempt from that trend, which occurs because our universities are forced by Government policy to have some of the lowest levels of income per student in the world while other countries are investing heavily to improve their universities and take them up the rankings."
The University of Otago, University of Canterbury and Massey University all maintained their performance while the University of Waikato and Auckland University of Technology jumped a band. Lincoln University dropped from 401-500 to the 501-600 ranking.
The 1000 top universities from 77 countries are published by Times Higher Education.
Globally, the University of Oxford retains first place in the World University Rankings. The University of Cambridge climbs two places to second, overtaking California Institute of Technology and Stanford University, both joint third. While the United States continues to dominate the rankings, Chinese universities are rapidly climbing year-on-year.
Otago is placed in the 201-250 band, maintaining the place it has held for the past two years.
"Otago's result confirm its strong position within the top echelon of the top 2-3 per cent of universities worldwide, and as one of New Zealand's top two universities," Deputy Vice-Chancellor professor Helen Nicholson said.
The University of Auckland's decline occurred as some Asian universities have risen up the table. It was overtaken by Shanghai Jiao Tong University, Zhejiang University and Nanjing University in mainland China and the Hong Kong Polytechnic University.
In addition, Peking University has increased two places to joint 27th, while Tsinghua University has climbed five places to 30th. Along with the National University of Singapore at joint 22nd place (its highest ever rank), there are now three Asian universities in the top 30 of the ranking for the first time under the current methodology.
Times Higher Education: global rankings
Institution - Rank 2018 - Previous year
University of Auckland - 192 - 165
University of Otago 201-250 - 201-250
University of Canterbury 351-400 - 351-400
University of Waikato 351-400 - 401-500
Auckland University of Technology - 401-500 - 501-600
Massey University - 401-500 - 401-500
Victoria University of Wellington - 401-500 - 351-400
Lincoln University - 501-600 - 401-500
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