The main catch is that the "free" houses are usually in complete disrepair and require a lot of non-free work to make them livable.

Building a new house in Japan is surprisingly affordable, but getting one built to Western standards (say, effective insulation and an expected lifespan of more than 20 years) is not. And I'm not even being facetious here: Japanese building codes assume that wooden houses last for 20 and concrete ones for thirty, then they get torn down and rebuilt by the next land owner.