Canadian officials across all three levels of government vowed to be vigilant in monitoring the Toronto region’s rapidly accelerating housing market, including possibly taking formal steps aimed at curbing speculative activity.

Federal Finance Minister Bill Morneau, Ontario Finance Minister Charles Sousa and Toronto Mayor John Tory met on April 18 to discuss the thorny question of how to cool the city’s residential real estate market, though they stopped short of providing details on specific measures. Possible steps include taxing homes left empty for speculative purposes, Tory said.

“We are looking at a vacant home tax and whether that could ensure real estate in Toronto is first and foremost as it should be, a place to live, and as an investment second,” the mayor said at a joint press conference with Morneau and Sousa. “I hope today’s meeting sends a message that we are concerned, we are preparing for intervention if needed and we’re committed to keeping Toronto as affordable as possible.”

Home prices in the Toronto area climbed 6.2% in March, the biggest one-month gain on record, according to a benchmark price index released on April 18 by the Canadian Real Estate Association, and are up almost 30% over the past 12 months. Bank of Canada governor Stephen Poloz said two weeks ago that the price gains are “divorced” from the usual measures of demand, such as income growth and demographics, and deemed them unsustainable.

Sousa said Ontario policymakers would unveil a “suite of measures” in the coming days in an effort to boost housing supply and address price gains in Toronto and the broader region. The provincial government is “aware that a response is needed now to address recent dramatic increases in rents and home prices”, he said. “Ontarians can’t afford to wait.”

Premier Kathleen Wynne’s Liberals are widely expected to reveal housing policy measures when Sousa issues his budget on April 27. In addition to imposing levies on empty homes, options to cool the market could include taxing foreign buyers, steps to boost supply, and rent control measures.

The path forward is mired in a lack of data, uncertainty on the role of foreign money, low interest rates and a strong Toronto economy. One thing officials did agree on was not to take any measures that would boost housing demand, Morneau said on April 18, adding that policymakers were also looking at steps to deal with speculation. The federal finance minister noted that there were no imminent plans regarding Ontario’s request to close a loophole on capital gains exemptions.

“What we are trying to do today is to work collaboratively to make sure we are getting at measures that can actually deal with that potentially speculative behaviour,” Morneau said.

The three officials also agreed to meet every three months to discuss “managing expectations”, housing affordability and the issue of speculative activity, according to a separate statement from Sousa’s office after the closed-door meeting in Canada’s largest city.