Australian cities are some of the most expensive in the world to live in, with a new report ranking Sydney third behind Japan's Tokyo and Osaka.

The Economist Intelligence Unit worldwide cost of living index 2013 placed Melbourne fifth after the Norway's capital, Oslo.

A dawn view of the Melbourne city skyline from Green's Point, Brighton. Credit:Penny Stephens

"Australian cities have been rising very quickly up the rankings as economic growth has supported inflation and currency swings to make them costly," the report says.

It was only a decade ago when there were no Australian cities among the 50 most expensive cities, while two years ago Australian cities began to be ranked among the top 10, it says.