Londoners are feeling pretty good about their city in the wake of the Olympics. Where better in the world to live right now?

Well, according to the latest "liveability" rankings published by the Economist Intelligence Unit, there are 54 better cities. In fact, despite the Olympics, London is ranked lower than last year – as is Manchester, the only other UK city included in the 140 "proxy" cities.

Sitting pretty at the top of the rankings, just as it was last year, is Melbourne. The rest of the top 10, in descending order, are Vienna, Vancouver, Toronto, Calgary, Adelaide, Sydney, Helsinki, Perth (Australia) and Auckland.

So how does EIA rate each city? "The first thing we assess is 'stability', followed by culture," explains Jon Copestake, the survey's editor. "We also assess infrastructure, healthcare and education."

By "stability", Copestake means crime rates and threat of terrorism. Due to the riots last summer and various street protests such as the tuition fees march, London and Manchester have seen their rankings suffer. And because London already had such a high score for culture and recreation, the Olympics has had little positive impact on its ranking.

"We don't include the cost of living as we do that in a separate survey," says Copestake. "But London falls into the second tier of cities because of a variety of factors. The availability of good housing limits London.The transport infrastructure is slightly overburdened. Healthcare doesn't score as well as it could. London has suffered from terrorism and crime and, as a result, there has been a general sense of unrest."

So what, if anything, could London do to improve its ranking? "In a way, London is a victim of its own success," says Copestake. "New York is the same, which has a very similar ranking. Adelaide moved into the top five this year because of its infrastructure improvements. Therefore, improvements such as Crossrail [an east-west rail tunnel currently under construction in central London] would raise the score. The disappearance of the threat of terrorism would also help. Overall, though, we find that cities that rank highest tend to be mid-sized, in countries with low population densities. That's why Australian and Canadian cities do well."

But aren't the top-ranked cities – let's be honest – a bit dull compared to buzzing metropolises such as London and New York? "It's a good point," says Copestake. "But we look for the cities that present the fewest challenges."

Does Boris Johnson have anything to say about this? Responding to EIU's survey, his spokesman says: "There are many ways to assess a global city's popularity. London regularly tops surveys as the best city in the world to live, work and invest in and respondents frequently cite its safety and low level of crime as a key reason."