Auckland University is the only New Zealand higher education institute to crack the top 200 in the Times Higher Education rankings, despite slipping 11.
Otago and Waikato also dropped while Victoria (Wellington) and Canterbury maintained their rankings from 2013.
Auckland University is listed 175th, down from 164 last year. Otago ranked 251-275 (down from 226-250) and Waikato fell to 301-350 from 351-400. Victoria (276-300) and Canterbury (301-350) held their rankings.
But Universities New Zealand (UNZ) says the downward trend is likely to continue unless the government offers more support. Acting chair Harlene Hayne says the rankings have grown increasingly important over the last decade and international students use them when choosing where to go.
"The unfortunate reality is that New Zealand universities have realised all the easy gains and the long term trend is downward," Professor Hayne says, adding government funding for students had been declining in real terms over the past two decades and universities had been forced to cut staff.
She says it isn't just an academic issue with universities contributing over $900 million annually to New Zealand's economy.
"This country's universities run the risk of hitting a tipping point where the best academics choose to work elsewhere and the best students choose to study elsewhere.
"Once you hit that tipping point, international experience shows there's no easy or quick way back."
1. California Institute of Technology
2. Harvard University
3. University of Oxford
4. Stanford University
5. University of Cambridge
Source: Times Higher Education rankings 2014-2015