Frustrated city dwellers longing for a quieter life are right to look with envy at all those sea and treechangers.

A new study shows living in country towns, where everyone knows everyone, is a happier existence than the hustle and bustle of city life.

Australians who live in regional areas with fewer than 40 000 people have a higher sense of personal wellbeing than those living in cities, the study shows.

It's also found that residents in the Campbelltown area of Sydney and Greater Dandenong in Melbourne, which have high numbers of recent migrants, have the lowest sense of wellbeing.

The Australian Unity Wellbeing Index measures people's overall feeling of wellbeing through satisfaction with factors including health, relationships, safety, standard of living and community connection.

The research shows that once the proportion of people in an area not born in Australia exceeds 40 per cent, wellbeing starts to fall.

Deakin University Professor Bob Cummins, the author of the index, said wellbeing was related to a sense of community.

"Anybody who's lived in a small country town knows . . . that everybody says hello to everybody else," Prof Cummins said.

"You become very quickly connected to those communities."

But he said areas with a high number of new Australians had lower levels of social connection.

"This acts then to reduce the wellbeing of people in those areas," he said.

"What this signals to government is that more resources are clearly required, not in terms of financial support . . . but in terms of social interventions, about bringing people of different cultures together."

He said policy makers needed to direct more resources to these areas.

The normal range in Australia for wellbeing, according to the index, is between 73.4 and 76.4, on a scale of 0 to 100.

Greater Dandenong has a wellbeing rating of 71.5 while Campbelltown is lower, at 70.8.