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.