I'm in Victoria BC and moving houses is a big deal here.
A lot of older houses ("century houses") are purchased here then floated across the Salish Sea to Washington State and set up there.
The lowest price for a house and lot in my neighbourhood in the past year was $950,000. And the house was moved before a new one was built.
Selling and moving the house slightly decreases the cost of the new place.
When I say a lot, I mean about 10 a year from a municipality of about 9,000, but in a greater city of about 750,000.
There were three houses moved up island from a property a block down the street from me, and another (slum) house and a rundown commercial property demolished to build a new four story/ 30 apartment condo. The smallest studio condos were presold for $650K but I don't know what the three bedroom penthouses went for.
Two blocks away a small '30s cottage was demolished after selling in the million dollar range. There is a handsome West Coast Modern house going up now.
So yes, depending on the area house building is a big business.
Selling an existing house can reduce the cost of the new build.
I don't know about renovations, but there are lots where houses are kept until they are resold.
The thing that bothers me is the renovation. Most of the houses here are sold either from the original site or from the parking site. The new owner then deals with foundations and renovations himself.