An international rating survey has marked down six New Zealand universities.
The QS World University Rankings are published annually by Quacquarelli Symonds, a British company, which this year rated 800 universities in areas such as academic reputation, student ratios and international students.
New Zealand is one of the few where all its universities made the top 500,
The University of Auckland remained the highest ranked university but has dropped from 83rd place in 2012 to 94th this year.
It is followed by Otago University in 155th place, down from 133rd and Canterbury in 238th place, down from 221st.
Next was Victoria (265), Massey (343), and Waikato (401).
The Auckland University of Technology remains about the same and is ranked between just below 500.
Lincoln University features for the first time and is also just below 500.
QS World University Rankings says New Zealand's universities have collectively seen a drop in academic reputation, faculty student ratio and international students.
Universities New Zealand chair Roy Crawford says the slide reflects very strong competition from well-funded overseas universities.
Professor Crawford says the university education system in New Zealand is very efficient when compared with the rankings achieved per dollar invested.
He says big wealthy universities overseas inevitably rank the highest due to the investment they make in education.
Massey University vice chancellor Steve Maharey says the drop is of concern and should be a reminder they must stay competitive.
Mr Maharey says more investment in universities is crucial.
He says universities here must play to their strengths and cites his university which, while ranked 343rd equal in the ratings, is placed at number 21 in the world in agricultural science.
The Tertiary Education Union says a lack of adequate government funding is to blame and the slide this year comes down to what the government is prepared to put into universities, compared with other countries, particularly in Asia..
The New Zealand Students Association says the reduction in ranking reflects a drop in the quality of tertiary education here.
However, Tertiary Education Minister Steven Joyce says the Government's investment in universities has gone up in the past four years and he doesn't believe the research capabilities of tertiary institutions will suffer.
Top Ten rankings
1 Massachusetts Institute of Technology,
2 Harvard University
3 University of Cambridge
4 University College London
5 Imperial College London
6 University of Oxford
7 Stanford University
8 Yale University
9 University of Chicago
10 California Institute of Technology