The cities which recently witnessed a spate of racial attacks on Indians were dubbed by overseas students as unsafe and inhospitable, the AAP report said.
The two were ranked the "most dangerous" and "unfriendly" places to live in, ahead of Perth, Brisbane and Adelaide, it said.
However, the survey conducted globally also found Sydney having a "big city feel" and plentiful entertainment on offer, while Melbourne was described for its bustling, multicultural vibe.
The report quoted international student recruiter IDP Education as saying that Australia's smaller cities were known for their own, very different strengths.
Perth and Adelaide's best attributes were their quietness and affordability, while Brisbane was rated highly for outdoor activities and being clean and green, it said.
IDP Education chief executive Tony Pollock said cities hoping to attract international students should play up their strengths.
"It is hard to argue with a finding that says Sydney and Melbourne have the entertainment and big city attractiveness," he said, adding "but a city with a reputation for being affordable, clean, quiet or green can be just as appealing to families overseas."
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