In particular, Kiev in Ukraine, Tripoli in Libya and Damascus in Syria dropped significantly in the survey by The Economist Intelligence Unit (EIU), dragging down the global average.
"Localised instability has also affected locations like Bangkok," it added, referring to months of political unrest that began last year in Thailand, followed by a coup in May.
Bangkok ranked 103rd out of 140 cities in the survey, down two places from 2013 and 2012.
Since 2009, average liveability in the world has fallen, "highlighting the fact that the last five years have been characterised by heightened unrest," the EIU said.
"Recent conflicts in Ukraine and the Middle East have underlined continuing fallout from a decade of destabilising events ranging from the war in Iraq to the Palestinian Intifada and the Arab Spring."
The cities are ranked based on stability, health care, culture and environment, education and infrastructure.
Melbourne was the most liveable city for the fourth consecutive year, followed by Vienna in Austria, and Vancouver and Toronto in Canada, the ranking said.
Three other Australian cities, Adelaide, Sydney and Perth, were among the top 10 cities in the world.
Syrian capital Damascus was the worst of 140 cities surveyed, while other bottom countries include Dhaka in Bangladesh, Port Moresby in Papua New Guinea, Lagos in Nigeria and Karachi in Pakistan.
"Those that score the best tend to be mid-sized cities in wealthier countries with a relatively low population density," the report said. "This can foster a range of recreational activities without leading to high crime levels or overburdened infrastructure."
Within Asia, the Japanese cities of Osaka and Tokyo are the most liveable in the region, followed closely by Hong Kong and Singapore. Seoul and Taipei also featured in the top tier of liveability, the survey said.
The lowest-ranked city in Asia-Pacific is Manila, whose rank improved to the same level as Mexico because "the overall level of global liveability has been decreasing," the EIU noted.
Other low-ranked Asian countries were Jakarta, Hanoi, Ho Chi Minh and Phnom Penh, it added.
Edward Bell, a senior commodities analyst at the EIU, said Japanese cities ranked high among Asian countries because of strong scores in culture and environment, health care and education.
"Temperate climates, unlike the hot and humid weather in regional hubs like Hong Kong and Singapore, help boost the scores for culture and environment, and strong availability of sports and culture also keep Osaka and Tokyo high in the rankings," he said.