Melbourne, Australia, is now rated the most livable city in the world, dislodging Vancouver, Canada, which has held the top ranking for almost a decade, according to the Economic Intelligence Unit's latest City Livability Ranking.

EIU, which provides forecasting and advisory services, said in its August report that Melbourne now replaces Vancouver as the city with the best living conditions.

"For the first time in almost a decade of reporting liveability, Vancouver is not at the top of our ranking of 140 cities (Vancouver was in joint first position with Melbourne in the 2002 survey)," EIU said.

"The general conditions required for a location to be awarded a high livability ranking continue to be well reflected in Australian and Canadian cities," EIU said.

It said seven of the top 10 cities are in Australia and Canada.

EIU noted that European countries showed a slight decline in livability due to the current crisis in the eurozone.

"This is particularly the case in Greece, where austerity measures and resulting protests have driven a 2.5 percent fall in the score for Athens. This is the only city in Western Europe that is below the 80 percent threshold where challenges are presented to livability. Consequently, Athens now has a rating below those of San Juan in Puerto Rico and Montevideo in Uruguay," it said.

EIU added that the Arab Spring and the civil war in Libya also had a bearing on the general liveability rating of the states affected in the Middle East and North Africa.

Harare, Zimbabwe, is the world's lowest-scoring city at just 38.2 percent, although this was an improvement over its previous score of 37.5.

"Despite hopes of elections in 2011, stability and healthcare scores of just 25 percent and 20.8 percent respectively highlight the city's (Harare) bleak prospects," EIU said.

EIU rates the cities based on the following categories: stability, 25 percent, healthcare, 20 percent, culture and environment, 25 percent, education, 10 percent and infrastructure, 20 percent.