You seem to have already answered the questions for yourself in the rhetorical post.
Sydney market is made up of a myriad of different areas that appeal to people (or don't appeal) for many different reasons. There is good value to be had at the moment and some apparently outrageous prices.
Many in Sydney are doing it tough and many are cruising just nicely.
CBA shares dropped to around $24 a couple of years ago and are now around double that. We can wait for them to go down to that level again on the basis that they shouldn't be that price now or we can buy now, wait for a drop or just walk away. Regardless of what we believe, the price is the price and it is so for many reasons - we don't have to agree with the reasons but we accept reality.
We have to deal with what is, of course we can have a view of what should be. The difference between the two is the real world and people with money will always determine the market.
It is a free world if we don't like something we have the freedom to vote with our feet, the reality is that many have done that in Sydney and decided to stay and have deemed it worthwhile to invest significant funds to do so.
