Canadian cities were also well represented with Vancouver, Toronto and Calgary in 3rd, 4th and 5th positions respectively.
At the other end of the scale, the least liveable cities in the world were found to be Libya, Nigeria, Papua New Guinea, Bangladesh and Syria.
To obtain the ranking, the EIU scored 140 cities on 30 factors across five categories - safety, healthcare, educational resources, infrastructure and environment.
Mayor Len Brown said the latest lift in Auckland's liveability ratings was an indication things were on the right track, but also a reminder there was a lot more to be done.
He said while Auckland was praised by the report authors for its high standard of education and for stability, the city was marked down for the quality of its infrastructure including transport and the quality of health care.
"Aucklanders told me their number one priority is to fix transport and they are proving they see reliable fast public transport as the answer but we can't wait any longer to build the City Rail Link.
"With the completion of the roll out of our new electric train fleet, Britomart train station is running dangerously close to capacity so the City Rail Link is now needed urgently."
This year's report also explained why some of the more popular destinations did not feature higher in the ranking . "The "big city buzz" that they enjoy can overstretch infrastructure and cause higher crime rates. New York, London, Paris and Tokyo are all prestigious hubs with a wealth of recreational activity, but all suffer from higher levels of crime, congestion and public transport problems than would be deemed comfortable."
The top 10 most liveable cities:
1. Melbourne, Australia
2. Vienna, Austria
3. Vancouver, Canada
4. Toronto, Canada
5. Calgary, Canada and Adelaide, Australia (equal)
7. Sydney, Australia
8. Perth, Australia
9. Auckland, New Zealand
10. Helsinki, Finland and Zurich, Switzerland (equal)
The two least liveable cities:
139. Dhaka, Bangladesh
140. Damascus, Syria