As of the 13th of October 2011, Google brought in a new proximity filter. So… if you are searching for "real estate Sydney" you will now only get results for real estate agents that whose office is situated in the Sydney City area. It's really pretty stupid. I mean….. when I'm searching for say… "Sydney real estate" I'm not interested in businesses that operate only in the Sydney CITY area… I'm interested in a broader search for businesses that operate within the Sydney METRO area.

Most people identify with the metropolitan area that is associated with a location name, not the city area which might only be a few dozen blocks….I think the reality is Google is just not putting enough money or brain power into Google Places or they would realize this.
Personally?  If I was Google showing Google Places listings I would show results based on location Metro, not City, with a weighting towards the city center.  I would offer a link ”re-sort by closest to city center” .  What I would NOT do is only show results sorted by closest to city center and not show anything a few klms out of this area.

GOOGLE!  People associate a location as the METRO area not the city center.  Some people who live in a  big city never even go into the city center.  They don’t see themselves as living in some different city.

Regardless of the SEOguys opinion, if you’ve been hit by a Google Places drop possibly because you in the METRO area for a location but outside the CITY area for a location, we can help you.  We can get you back into Google Places, 100%.  No tricks. No breaching of Google TOS.  No moving of map markets. Nothing a competitor can complain about of that you need to keep quiet about.

Just back into Google Places, guaranteed, regardless of your proximity to the city center.