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A suprise new leader has been named for Australia as two capitals hit the global top 10 in the latest Oxford Economics analysis.
Two Australian capitals have hit the top 10 of an elite global index, with two others penalised for shock surges in housing costs – seeing a surprise new top city named for the country.
The Oxford Economics 2025 Global Cities Index – which uses a pool of over 40 economists to rank the world’s top 1,000 cities across economics, human capital, quality of life, environment and governance – named a surprise leader in Australia, Melbourne, singling out major sporting events, cultural activities, and major green flags for its thriving universities.
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The severe cost of housing is expected to continue to impact Australian cities’ standings on international rankings.
Sydney which just pipped for the Australian lead, hot on its tail in seventh position, after being smashed by economists in the environment category where it ranked 145th in the world due to “severe temperature and rainfall anomalies” as well as bush fires.
Brisbane was ranked 23rd off a heavy penalty for quality of life where it ranked 87th in the world, with a specific red flag being its shock cost of housing.
The fourth city to make the world’s top 50 was Perth which came in 31st spot, and like Sydney its worst category was environment where it ranked 208th in the world – not due to air quality or emissions but because of “the severity of potential natural disasters and climate anomalies”.
The top 10 cities on the index were New York, London, San Jose (California), Seattle, Melbourne, Sydney, Boston, Tokyo and San Francisco.
Australia’s highest ranking city in the latest Global Cities Index 2025 is Melbourne, boosted by its strong events and sporting features including the Grand Prix. Picture: Sarah Matray
Melbourne
Melbourne was the highest-ranking Australian city after doing “particularly well in the human capital and economics categories”, the report said.
“Indeed, Melbourne has, in the last two decades, been catching up to Sydney in aspects ranging from economics to population size.”
“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.”
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Melbourne was ranked 6th in the Global Cities Index 2025. Source: Oxford Economics.
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Its highest category ranking was 12th for human capital which Oxford Economics said was due to “its many high-quality universities, with two of them notably belonging to the prestigious ‘Group of Eight’, a club of top Australian universities”.
It ranked 16th for economics, 54 for quality of life, 67th for environment and 15th for governance, with its strengths being high life expectancy, many universities and a large foreign-born population, while weaknesses were high housing expenditure, its older age profile and more severe natural disasters.
The report made a big call for the future saying “Melbourne ranks highest out of all Australian cities in our index and is on a path to overtake its main competitor as Australia’s largest city”.
Having two universities in the “Group of Eight” including the University of Sydney have given Sydney a major edge over the competition.
Sydney
Oxford Economic said Sydney was “the most iconic Australian city and the largest”, the financial capital, with a large business services sector and key institutions like the Reserve Bank and Australia’s stock exchange.
Sydney’s best category ranking was 10th in the world and first in Australia for human capital given two universities in the “Group of Eight” and several others, high average educational attainment level and many foreign students.
The New South Wales’ capital’s score in the category was given a big boost due to having the highest foreign-born population share of all Australian cities and 14th-highest globally.
Sydney was ranked 7th in the Global Cities Index 2025. Source: Oxford Economics.
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Weaknesses were its high housing costs, given steep rises in property prices and rents and weak housing supply, which impacted its quality of life score (39th in the world).
Its worst ranking was in the environment category not due to pollution but because “Sydney faces more severe temperature and rainfall anomalies than Melbourne (a city with a milder, temperate climate),” the report said, adding “Sydney tends to be more affected by bush fires due to its forested surroundings, further increasing the environmental hazards.”
“Sydney has lost some ground to its main competitor, Melbourne, in recent years. Nevertheless, Sydney obtains a very strong result overall in our 2025 index.”
Brisbane was heavily penalised for the surge in its cost of housing with analysts warning the city will have to improve affordability for residents for future success.
Brisbane
The Queensland capital was ranked 23rd in the world, after being the surprise recipient of the highest ranking in the country for governance (15th), benefiting from Australia’s “strong record on advancing political rights and civil liberties”.
“Its economy benefits from high levels of GDP, and employment growth is among the fastest in Australia. This is in part thanks to the city’s involvement in the mining industry, for which it houses several company headquarters and operational offices.”
But the report warned that reliance meant Brisbane’s growth did tend to fluctuate with global commodities markets, having to rely on other sectors like education, tourism and technology to dampen those shocks – which saw it ranked 41st in the economics category.
It said Brisbane had one of the youngest populations out of Australia’s major cities with two major universities, one of which was in the “Group of Eight” helping its human capital ranking of 46th.
Brisbane was ranked 23rd in the Global Cities Index 2025. Source: Oxford Economics.
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Its lowest ranking was 87th for quality of life, “although it is still in the top 100 globally”, driven down by the cost of housing. “Brisbane’s growing population has caused demand for housing to increase, while supply has struggled to keep pace.”
On environment Brisbane was ranked 54th in the world, with existing “on a flood-plain” specifically flagged given it “led to it being hit several times by damaging and deadly floods in recent history”, causing widespread damage – but its natural disaster risks from storms were also flagged.
Oxford Economics warned “Brisbane has a strong economy with a capable workforce, but it will need to invest more into its housing and other infrastructure in order to improve affordability for residents and manage the effects of climate change”.
Busselton Jetty at sunset is part of the charm of Western Australia, but natural disasters dragged down Perth’s ranking in the Global Cities Index this year.
Perth
The fourth ranked city in Australia was Perth, which also came in at 31st on the global index, with its performance “broadbased across the categories”.
“The city serves as the operational and export basis for a large part of Australia’s important mining sector. This is both a strength and a weakness for Perth; mining activities generate substantial economic value for the city, contributing to a high GDP per person as well as a high rate of growth for a developed economy.”
But Oxford Economics said that reliance “comes with drawbacks, as it makes the city vulnerable to commodity price and demand fluctuations” ranking it 78th in the world for economics.
Perth was ranked 31st in the Global Cities Index 2025. Source: Oxford Economics.
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Perth was flagged as having the second-fastest population growth and the second-largest share of foreign-born residents in Australia, with a high level of educational attainment, and one university in the “Group of Eight” boosting its human capital ranking (25th in the world).
On governance it ranked 15th in the world, and quality of life came in at 63rd with specific mention of not all Perth residents benefiting from high incomes from mining, with high income inequality and high housing costs.
Its isolation was flagged as a negative for its cultural life, but for environment Perth ranked 208th in the world due to “the severity of potential natural disasters and climate anomalies”.
“A key challenge for Perth, then, will be to continue to attract talent to sustain its current growth path.”
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