Perth sits above only Darwin and Sydney on a list of Australia's liveable cities, according to a survey that has sparked fresh debate over the growing gap between winners and losers from the mining boom.
Perth fell four places this year to ninth out of 11 in the Property Council of Australia review.
It scored badly for cost of living, job opportunities and entertainment options in the survey of almost 6000 people nationwide.
The traffic network was also hammered with just 26 per cent of respondents saying it ran smoothly with minimal congestion.
Committee for Perth chief executive Marion Fulker said the pace of change as the mining boom transformed the city could have contributed to the lower ranking this year.
"If you are not a beneficiary of the boom, it's just getting harder," Ms Fulker said.
Until now, Perth was the kind of city where anyone with gainful employment could enjoy a reasonable quality of life. "Now we're starting to see that's not the case," she said.
Adelaide took out the top ranking this year with Canberra a close second and Hobart third.
Ms Fulker said the top-ranked cities were not grappling with the population growth Perth and other capitals faced. Adelaide had not had growth pressure for some time.
"In a boom town scenario, the city starts to change and people feel they don't know their city any more," Ms Fulker said.
Real Estate Institute of WA president David Airey defended Perth's liveability despite relatively high rents and property prices. Many people would find Perth sensational because it was young, vibrant and relatively easy to get around compared with other cities, he said.
"It has a much more cruisy lifestyle compared with other places and economically it's significantly in front of other States," he said.
Perth ranked last for entertainment options with only 55 per cent of respondents agreeing it had a "vibrant cultural entertainment scene", down from 61 per cent. In Melbourne, 85 per cent of people recognised its "cultural vibrancy".
Perth International Arts Festival director Jonathan Holloway said more work was needed to ensure Perth had year-round cultural offerings.
“I think as Perth grows economically, our culture has to follow. A cultural renaissance is as important as an economic renaissance and I think this is one of those moments it could happen,” Mr Holloway said
Lord Mayor Lisa Scaffidi said prosperity had forced up some prices but Perth consistently ranked in the world's top 10 cities in a respected liveability index.