Rent is maybe 30% higher in Tokyo, even less if you live on the end of a train line. Can you imagine how many people would move to Bay Area CA or New York City or Boston or Seattle if their rent was only 30% higher? Pre pandemic my 3 bedroom in Boston area was 3500/mo. Since the pandemic rents have gone even higher. We have bidding wars of people trying to win a rental unit. Bidding wars. It’s ridiculous.
Also I don’t see your point about houses being torn down. If anything that should make it more expensive (since buying used and not rebuilding is cheaper). Realistically rebuilding is vital (in conjunction with subdivision) because that’s how you increase density
Osaka and Nagoya are losing people also. The changes are for metro areas, not city cores.
> If anything that should make it more expensive (since buying used and not rebuilding is cheaper).
It simply means that you can't compute new housing very easily by new housing construction rates (you have to subtract old housing demolitions).
Density currently isn't increasing (you tear down one three story narrow house and replace it with another three story narrow house, you need to buy a bunch of SFHs to make a new apartment building).
Tokyo is an example where houses are torn down every 39 years so a new one can be built. Also, given the lack of population growth in Japan as a whole, the growth rate in Tokyo is anemic. Tokyo metro area has even been losing a small amount of population in the last three years: https://www.macrotrends.net/cities/21671/tokyo/population