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The soaring prices and limited supply are sparking debate among policymakers on how to ensure there is enough affordable housing while trying to avoid a market crash. Options under consideration by the city and province of Ontario include a new tax on foreign buyers or a tariff on vacant homes to curb speculation.

No Consensus

“I have a deep concern about the frustration that must be faced by young homebuyers trying to get in this market and just by people trying to move up in their housing,” Toronto Mayor John Tory told Bloomberg Television on Tuesday.

Tory said there’s no consensus yet on “the nature of the forces that are pushing the prices up the way they are” and what is best to do about it.

Toronto Real Estate Board President Larry Cerqua said it’s encouraging that government officials haven’t introduced any “knee-jerk” housing policies.

“Policy makers must remember that it is the interplay between the demand for and supply of listings that influences price growth,” Cerqua said in a statement.

The Toronto Real Estate Board is among opponents of the idea of implementing a foreign buyers tax to curb price gains. The group says the real problem is a dearth of housing inventory.