ZRE is an equal-weight ETF, and so any weakness in one particular industry of REITs will have a relatively large negative impact on the ETF. This was seen particularly in the office REITs space, where the reduction of office usage put significant pressure on REIT ETFs. Looking under the hood of the ETF, several of these names have seen long-term declines in price (NWH.UN, AX.UN, HR.UN, PMZ.UN, and others). Although, the high yields help to offset these declining prices.
It is important to note however, that while ZRE's price has been flat since 2012, in 2021 it was 40% higher than today, and similar with 2018-2019.
House and property prices are higher from 10 years ago, but it's important to keep in mind that these are businesses which acquire properties every year, including the years where property values were much higher (2021, etc.). In addition, as interest rates rise, the cap rates for REITs rise, meaning the fair value of the properties on their balance sheets decline, impacting their valuation. Higher interest rates also negatively impact their ability to finance, thus interest expenses, putting pressure on their profit margins and thus valuations.
ZRE's benchmark is the Solactive Equal Weight Canada REIT index, which since inception it has underperformed by only 0.01%.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in ZRE.