Sydney regularly ranks high on lists of the world's best cities, with its booming economy, enviable beaches and a laid-back, sun-kissed lifestyle - but critics see clouds on the horizon.
The cosmopolitan jewel in Australia's crown has a reputation for arts, fashion, commerce and culture and on a beautiful day down by the harbour, feasting on fresh seafood, it is hard not succumb to its charms.
But its fabled lifestyle is under threat from creaking infrastructure, traffic congestion, rising prices and a population boom.
"I love living here. Sydney really does have so much going for it," said Linda Townsend, an Australian mother-of three who has also lived in London, Atlanta and Hong Kong.
"But I've also travelled widely enough to know that Sydney is not the best city for many things. Living here has its daily struggles and stresses.
"It's become very expensive, the transport isn't good and it's getting worse."
Sydney is the country's most populous city, with some 4.5 million people already crammed into its borders.
And it is growing faster than anticipated, with forecasts that it could pass six million within the next 25 years, presenting some serious challenges to urban planners.
While many live the good life, Sydney is seen as a city of two halves, with some residents housed in downtrodden and fast-expanding suburbs, mostly in the west, where crime is rife.
They face crowded roads, ageing trains and buses for their daily commute, some of the most expensive housing in the world and rising living costs.
Even Prime Minister Julia Gillard, who resides at The Lodge on the harbour opposite the Opera House when in Sydney, acknowledges that being in the country's premier location is not all it's cracked up to be.
"The government understands families are doing it tough and Sydney is an expensive place to live," she said recently.
A key gripe of Sydneysiders is its creaking infrastructure.
Critics blame the problems on a lack of vision by the former New South Wales state Labor government that was turfed from power this year.
Bernard Salt, a leading commentator and advisor to corporate Australia on demographic trends, said Sydney had been mismanaged.
"There's been poor vision and a lack of courage," he said, saying the 1990s will be remembered for the 2000 Sydney Olympics and "all available resources being sucked into that".
"Then in the 2000s they realised the roads were congested, transport didn't work and now we're paying for it."
In an attempt to sort out the mess, former premier Nick Greiner was appointed in May by the new Liberal government to develop five and 20-year infrastructure plans to help guide the city's future.
Part of Sydney's problem has been its inability to attract cash from federal funding body Infrastructure Australia, which has repeatedly rejected its submissions as inadequate.
This has meant major Sydney transport needs remain unmet and people sit in traffic jams, on overcrowded buses that travel at a snail's pace, or on trains that haven't been upgraded in years.
"The challenge is there for the government to build the infrastructure we need to stop congestion crippling our city," National Roads and Motoring Association president Wendy Machin said.
Affordable housing is another hot-button issue.
Costs have surged, with median Sydney house prices now among the world's most expensive, according to consultancy group Demographia.
This has put the Australian dream of owning a house with a backyard out of many people's reach.
Rhonda Daniels, an expert in urban planning at the Institute of Transport and Logistics at the University of Sydney, said the city must address these issues urgently if it wants to keep its reputation as a great place to live.
Yet despite the challenges, she disputes that Sydney's sought-after lifestyle is under threat.
"If a city is growing, then it means people are still attracted to its lifestyle, even if it has its drawbacks," she said. "People can't have it both ways."
John Latto, an Irishman who emigrated to Sydney to escape the overcast skies and cold weather of Belfast, agrees.
"People complain about Sydney, its too expensive, the roads are packed, but look at it," said the 31-year-old landscape gardener, as he pulled on his wetsuit to have a surf at Manly beach.
"I don't care what they say, this is paradise."
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