And while the drop may only be a small one, both French cities are very far from the top of the table drawn up by HR resource firm Mercer, using a variety of factors including transport, culture, education and security.
Nevertheless, Paris is still a very attractive place to live, Mercer says, noting that the top ranking cities are generally of medium size.
It was such a medium-sized city, the Austrian capital Vienna, that took the number one position in this year’s survey, with Zürich, Auckland, Munich, and Vancouver coming next. It was the 9th year in a row that Austria has topped the list.
Despite its fall from 38th to 39th place over the past year, the French capital is still a great place to live as it benefits from good transport, leisure and shopping infrastructure, the study said.
One thing that Paris fell down on, according to the survey was in the category of “medical and health considerations”, which is judged by a variety of factors including sewage, waste disposal and air pollution.
Paris has been dogged by spikes in air pollution in recent years which has prompted authorities to ban the most polluting cars from the city and make public transport free.
It came in a lowly 67th place in the table for this category, with Honolulu taking pole position and Helsinki and Ottawa taking joint second.
In the general rankings, Paris appears to be still struggling to climb back to its position of 27th place in 2015.
It plummeted ten places in the 2016 ranking – largely due to two major terror attacks in 2015, which saw 17 people killed in January and 130 in November.
Nevertheless it was ranked above its great rival London as well as other European cities such as Barcelona and Madrid.
But after that drop of ten places a spokesperson for Mercer was eager to stress the benefits of Paris.
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French soldiers patrol at the Eiffel Tower. Photo: AFP
Lyon, which was voted France's most attractive city in 2015, fell from 39th to 40th place in the rankings.
Mercer conducts its Quality of Living study annually to help guide multinational companies and other employers on how much to pay employees posted abroad.
It looks at a total of 39 factors including health care, schools, transport, shopping, leisure and cultural options, and security.
Sana'a in Yemen, Bangui in the Central African Republic, and the Iraqi capital Baghdad were the lowest ranking countries on the list.
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A beach in Cabourg, northern France. Photo: AFP