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There will always be good people living in Sydney. But I do agree the city has gotten too expensive. Small businesses will suffer for it.
The price discrepancy from the rest of the country is likely all property-related. Housing is insane, and businesses face much higher rents that they have to incorporate into pricing. But the base cost of goods is less because of the port, shorter transportation distances (e.g. supermarket prices are insane in some remote inland communities), and more competition (e.g. Amazon Prime actually functions and is relatively convenient).
Sydney is like New York City and London where there will always be population demand — regional Australians will always want to move there and locals cannot imagine living anywhere else. The challenge for locals will be providing the life that they grew up with for their kids — living in the neighbourhood they grew up in, private school, etc. will need to be funded by the Bank of Mum and Dad.