In my Eu country, and also the neighbouring countries, the general rule for a detached building is that it has to be build 3 to 5 meters (depending on the local rules) from the terrain boundary. If the builder wants to build closer, then they have to build a blind wall on the boundary with certain minimum fire + insulation requirements. If then someone else builds against that blind wall, that someone else is expected to buy "half" of the existing wall, ie: pay the first builder some money.

So we fortunately don't get those dystopian tightly packed detached housing neighbourhoods.

The shared wall between a home and any other building is also required by law to have certain minimum acoustic insulation values. But there's plenty of old buildings where this isn't the case yet. Living in an apartment building without proper acoustic isolation is horrible, I'd rather live in a dystopian detached house, so maybe that's why those houses are still popular in North America and Australia: guaranteed proper acoustic insulation.