I have to admit I haven't looked at house pricing much yet, mostly because buying isn't something I am planning on doing until I commit to permanent residency. But I can say the rumor that Japanese houses decrease in value seems to not count closer to Tokyo city center, so it isn't necessarily a bad investment. Talking to Japanese it seems they move out into the suburbs when they transition into the house buying part of life, because that's where it is affordable.

Renting apartments is also relatively affordable. I rented a standard 1k(bedroom + kitchen in the hallway) 14sqm apartment near the yamanote line (look it up "Tokyo 1k apartment" and you will see some floormaps). This cost 85k yen/mo, or ~650 USD in 2022 money.

When it comes to the free houses (akiya), there is apparently often a catch that you are expected to renovate them within a deadline, so you don't just get free property.

Greg from "Life Where I'm From" is a reputable source, and he has a lot of experience with property "out in the sticks". I recommend watching this, and maybe some other videos he has made regarding Nikko: https://www.youtube.com/watch?v=m3I9KXkJFPU

There are two main reasons why housing is more affordable in Japan compared to many other highly developed nations: (1) There is functionally no NIMBY-ism. There is a single, unified national building code that screams YIMBY-ism. (You can Google about it.) Also, almost no buildings are protected from tear-down/re-dev. As a result, large cities in Japan appear to be constantly under construction. Tear-down and re-build is a very common pattern in urban areas. (2) Home loans for 30 years are less than 1%, and required down payments are tiny (0% to 10% is common). This dramatically changes the affordability equation.

The "free houses" you have heard about are called akiya (空き家). There are countless YouTube videos and blog posts to learn about how it works. You are basically buying an abandoned home from a local gov't agency.