I specialize in working with investors, both local and international. Since I'm constantly looking at a range of deals, I would qualify deals in Berkeley as being below average. As you've pointed out, there's an expectation for a constant stream of rental income with the university nearby. However, investors have bid up prices so high that you would be hit with negative cash flows. While that may be the norm in Australia, with the range of opportunities available in the Bay Area, that doesn't make much sense.
In the south bay, cash investors can get 7-10% net cash returns (after all expenses) and financed deals can get you up to 25% returns. I don't know if you have the ability to get financing, so you can at least look at the cash returns as a benchmark.
Berkeley is seeing a rise in prices right now, due to scarcity of inventory and historically the lowest loan rates - and so that's driving prices up and creating multiple offers on most Berkeley properties on the market.
Will this continue? No one knows for sure. No one can promise anything about housing prices, just as no one can predict what the stock market will be doing in several years. But a good, solid condo not too far from UC Berkeley and close to transportation will likely always be rented if it's manage dwell and will probably retain its value.
I've developed a condo project and had to write CC&Rs for it. I've also represented investors in buying rental properties. There are things you'll want to pay attention to - the conditions and regulations of any property that you buy, making sure it allows rentals, make sure the association is financially healthy, checking on owner occupancy rate, etc., etc. If you do due diligence and have the funds to compete in the Bay Area market, you can get yourself a great investment.
Awesome that you're living in Sydney! I loved it there and in Byron Bay when I visited 4 years ago!