I'm writing a middle grade young adult novel. The setting is Australia and mentions suburbs familiar to many in Australia. I'm wondering if I should make it more generic so that larger markets might pick it up. Do you think that would be a good idea?
Before we get to that, I need to call you on 'middle grade young adult' - for the publishing industry (and for parents, teachers and librarians - just not, often, for kids), 'middle grade' is distinct from 'young adult', so before you do anything else you should work out which age group you're writing for.
Now, to your setting. You could make it more generic for that reason, but does that detract from the story itself? It's nice for stories to have settings, and they have to be set somewhere, so why not make it Australia? Of course, if what you really want is an overseas publisher more than an Australian publisher, you may wish to make it setting-neutral but, again, this shouldn't be to the detriment of the story.
Something that may influence your decision: children generally aren't as finicky about story settings as adults, which is why Australian children's authors tend to 'travel' more easily than authors for grown-ups. So your Australian story won't necessarily count against you if you're submitting in the US, for example. (It may in the UK, because they may be surprised to learn that your characters aren't convicts riding kangaroos instead of horses ... I'm joking! I'm joking!) And the Europeans certainly don't care that our stories are set here - in fact, it can be a plus.
Fundamentally, though, you should give the story what it wants and then work it out from there.