Melbourne was Australia’s top city, making ninth place due to the strength of its economy, second in size in Australia to Sydney but stronger on GDP per person, growth and jobs growth.

While let down by its high-cost housing and the nation’s slow internet system, it benefited from its cultural strengths.

“Because of its many art galleries and the fact that it hosts major sports events, such as the Australian Open and the Australian Grand Prix, Melbourne is widely considered to be the cultural and sporting capital of Australia,” the researchers found.

Sydney was ranked 16th overall, behind Copenhagen and ahead of Toronto, buoyed by its broad network of corporate headquarters, high wages and strong economy, including its draw as an international tourism destination.

But it was held back by high-priced housing which depressed the city’s quality of life, while its natural environment (climate, air quality) was also ranked by Oxford as a shortcoming.

“Still the foremost city in Australia, Sydney continues to be an attractive place for individuals and companies alike,” it said.

“However, as shown by its ranking in the index, Sydney has lost some ground to its main competitor, Melbourne, in recent years. In order to bounce back, Sydney will have to make gains in its two weakest categories: environment and quality of life.”

Sydney was ranked 230th in the world in terms of quality of life, below that of the English city of Northampton and just ahead of Liverpool.

But Canberra, listed 44th overall, was ranked second in terms of quality of life, with Oxford’s analysts citing several reasons for its high position.

“This impressive feat is driven by the city’s high incomes and low degree of income inequality, due to the availability of stable and high-paying government jobs,” it said.

“The city also has excellent healthcare facilities and ranks among the highest in the world for life expectancy.”

Canberra was famously the compromise location for the nation’s capital after colonial federation leaders agreed through gritted teeth that neither Melbourne nor Sydney could become federal parliament’s home.

According to Oxford, that decision has delivered in spades to Canberra’s nearly 500,000 residents.

“Overall, Canberra is a true government city and many of its inhabitants are related to the public sector in some way. This has been a boon to the Canberrans, who, thanks to the many government jobs available, are among the highest and most equally paid in the index,” it said.

Canberra’s biggest drawback, according to Oxford, was the natural environment. It said the city was subject to natural disasters, citing the bushfires of 2020 when Canberra, along with most other capitals, was shrouded in smoke.

Canberra, where motorists have to navigate kangaroos and rabbits around Parliament House, had an environmental ranking on par with London.

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Oxford Economics’ director of city services, Mark Britton, said the index was a way to determine a city’s strengths and weaknesses.

He said major global trends would affect all major cities in coming years.

“These include economic turbulence, political instability, high debt levels, trends in globalisation, pressures on healthcare and housing, and the effects of climate change,” he said.

“There are several global trends that have the potential to buck these rankings.”