You know what, you are absolutely spot on! Property prices up a few years keep whining. Cars have been a bubble since god knows when. You see the number of expensive cars like city, civic, accord, vios, forte etc. Yes, those are freaking expensive cars for Malaysians. Notice I did not even mention the BMWs and the Merc. Those are astronomical in terms of Malaysian's level of income. Yet, Malaysians happily drive them. No complaints, man. Got lah, got complain, but nothing one, accept it and move on lo. The same thing with property, complain lah, but nothing much can be done lah. want to complain, start with the car first...persevere until you get the prices down..then only target property...

Relative to cars, Malaysian property should go up another 200%. Then, we can justify the car prices.

My two cents: It's all about consumer psychology.

Both luxury houses and luxury cars are designed to be "consumed" by the "consumer" in order to improve his/her welfare. Taking out the "land" aspect, if the consumer desires a luxury car more than a luxury home, then buying a luxury car improves his/her welfare more than a luxury home. Nobody "needs" a brand new luxury home. They just desire it. The desire for brand-new luxury homes over older ones is just as rational (or irrational) as the desire for a brand new BMW. Or as rational as the desire for Apple over Acer, or drinking at bars and clubs over buying drinks at 7-11. A person who prefers a 200k luxury car over a 800k luxury property, could rationally choose to buy the car, and then use the balance of 600k to buy an older, less luxurious house in the same vicinity.

Currently, I see the Malaysian consumer trending towards desiring luxury homes. Price differentials between new luxury properties and older, more run down properties in the same area are huge. Luxury properties have nicer fittings, nicer landscaping, nicer gyms, nicer pool, nicer design, branding etc, and that's what you pay extra for. People are willing to forgo consuming many other desirable goods (like nicer food, cars, electronics, clothes etc) in order to purchase luxury homes because they desire the features and prestige of luxury housing. This desire is exactly the same as our established desire for expensive cars.  I'm not yet convinced that our recent consumer love affair with luxury housing at the expense of other goods will last forever, and I'm saying this as myself a lover of luxury fittings, facilities and landscaping. Only time will tell.

One last observation. I note that the prestige of driving a 3 series in Malaysia is more akin to the prestige of driving, say a 7 series or a Rolls in the West. The intangible value of the BMW brand is also a lot stronger in a country like Malaysia where such cars are comparatively rare. Heck, even an "affordable" Japanese or Korean sports car is looked upon like a Ferrari or Porsche in terms of prestige. There is therefore a lot more intangible value in purchasing a luxury car in Malaysia than in the West. Although this does not even come close to justifying the price for new cars, it certainly does so for grey market imports, and that's why these importers are seeing great sales.