It is very weird how houses depreciate very quickly in Japan.

There is surely intentional government policy behind this, and this would have significant impacts on the broader housing environment.

I recall reading at one point for example that the property transfer tax is lower for empty lots than it is for occupied lots. Another subtle housing policy that incentivizes people to tear down old houses.

Much has been written about Japan's zoning impacting its housing prices and rents, but imo it's as likely that the various tax and housing policy that creates this incentive to tear down homes is as important of a factor in creating a housing market that looks very different from other rich nations.