It's true for more places than not. Yes, you're seeing more homes that have been remodeled and put up for sale than in the past, but these are the minority -- mostly newer mansions in cities. For many/most homes, it's often financially better for the owner to just tear them down, or leave them to rot (the latter is a big problem across Japan).

Small towns really do have programs to give away homes if you commit to remodeling them or tear them down. Even in bigger cities it isn't difficult to find abandoned properties.

(I'll also add: people see things like Cheap Houses Japan, and make incorrect assumptions about the state of the resale market. For a large portion of those "cheap" properties, you'd have to put in 2-3x the sales price just to make them livable. In other words, the owners are trying to solve their financial problem by dumping it on someone else who is more willing to deal with it. This could be appealing for someone who wants a vacation home and loves the area, but it's not a healthy housing market.)

I think we are talking about different things here. The parent was referring to the practice of demolishing “perfectly serviceable” homes in order to construct a new home on the same land, implying a sort of deliberate wastefulness in the Japanese housing market.

But you’re talking more about markets where there is very little demand (due to declining population) for both new and used housing. Or homes that are in such a state of disrepair that it makes more sense to demolish them and rebuild from scratch.