Canberra has been ranked as the second-best city in the world for quality of life thanks to high life expectancy, education and lower income inequality.
But the capital was marked down for its slow internet speeds, low economic diversity and higher exposure to natural disasters.
The Oxford Economics Global Cities Index looked at the 1000 largest cities in the world in five categories to come up with the rankings: economics, human capital, quality of life, environment and governance.
Canberra came in second behind Grenoble, France, for the quality of life indicators. It was the only non-European city to claim a top 10 finish, beating cities including Zurich in Switzerland and Bergen in Norway.
"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," the report said.
"The city also has excellent healthcare facilities and ranks among the highest in the world for life expectancy.
"Although, like many other Australian cities, Canberra underperforms when it comes to access to fast internet due to poor internet infrastructure."
Oxford Economics perhaps did not factor in long wait times in ACT emergency departments or a shortage of healthcare workers in its analysis of Canberra's health facilities.
The report noted Canberra lacked diversity in its economy, had fewer corporate headquarters and tended to attract fewer foreign workers than other Australian cities.
But it said Canberra punched above its weight in access to higher education, thanks to the Australian National University which "is regarded as one of Australia's best".
The reviewers didn't look favourably on Canberra's environment due to exposure to bushfires and floods.
"Canberra's nickname is 'The Bush Capital', owing to its location in the middle of the Australian bush which makes it particularly vulnerable to wildfires," she said.
"These wildfires also contribute to the air quality occasionally deteriorating during the fire season, a trend made worse by Canberra being in a valley as this causes smoke to be trapped over the city."
While Canberra was superior in the quality of life category, Melbourne got the best overall ranking in the Global Cities Index, coming in at 9th place.
The overall top cities in Global Cities Index were:
- New York, United States
- London, United Kingdom
- San Jose, United States
- Tokyo, Japan
- Paris, France
- Seattle, United States
- Los Angeles, United States
- San Francisco, United States
- Melbourne, Australia
- Zurich, Switzerland
In the top 50 overall rankings, Sydney placed 16th, Perth was 23rd, Brisbane was 27th and Canberra was ranked 44th.
Winners in the quality of life category tended to be smaller ones that provided residents with a range of recreation and cultural amenities.
The top cities in the quality of life category were:
- Grenoble, France
- Canberra, Australia
- Bern, Switzerland
- Bergen, Norway
- Basel, Switzerland
- Luxembourg, Luxembourg
- Rykjavik, Iceland
- Zurich, Switzerland
- Gent, Belgium
- Nantes, France