Japan's population is declining. What's your point?
Why would you expect house prices to go up when there's a ridiculous oversupply of housing. There's only 55M households in Japan, and there's ~9M vacant homes. That's ~14% of homes.
Housing is an expense unless there's someone to live in it and pay rent.
Tokyo is growing faster than New York, London, or most other major Western metros.[1] (It's true Japan as a whole has slow growth, but Tokyo still has robust growth because or rural to urban migration.) Yet real housing prices have not risen in Tokyo in 25 years.
Even so, normal people can and do buy property in close proximity to the city center all the time, and cheap rent spots are easy to come by. Minato-ku was definitely crazy overspeculated, but go 15 minutes away by train and you get an order of magnitude cheaper housing.
Why would you expect house prices to go up when there's a ridiculous oversupply of housing. There's only 55M households in Japan, and there's ~9M vacant homes. That's ~14% of homes.
Housing is an expense unless there's someone to live in it and pay rent.