Terror boots Sydney out of liveable top 10

A perceived terrorism threat has booted Sydney from the top 10 of the world's most liveable cities, which again is led by Melbourne.

The Victorian capital topped the Economist Intelligence Unit's most liveable city index for the sixth year running on Thursday, again just pipping Austria's Vienna and Canadian duo Vancouver and Toronto.

Adelaide again landed fifth, tied with Calgary.

Sydney was surprisingly dumped from seventh to 11th with the index report owing the drop "to a heightened perceived threat of terrorism".

"Although the top five cities remain unchanged, the past year has seen increasing instability across the world, causing volatility in the scores of many cities," the report said.

The report owed the high rankings of Australian and Canadian cities to their wealth and medium density which can "foster a range of recreational activities without leading to high crime levels or overburdened infrastructure."

Melbourne mayor Robert Doyle said retaining the title was a fantastic accolade.

"We do not take this title for granted and are constantly planning and implementing policies that will continue to improve our quality of life," he said.