Rents in Northern Irish cities including Belfast and Dublin are likely to be among the lowest in Europe and are set to fall further in coming years as the economy slows, a report says.

In Northern Ireland, the average monthly rent is estimated to fall by 4.7% in 2020 from the current level of £2,800, the Property Alliance said in its quarterly rental report.

The figure will fall by 2.4% in 2021 from £2.9, the report said.

The report also said rents are expected to fall to £1,500 a month in the region, which would be the lowest rate in the UK, and is projected to fall below £1 a week in the next two years.

The Property Alliance says that in 2020, a new housing stock is expected to reach the UK market.

The Government is also planning to build 3,000 new homes in Belfast and another 5,000 in the capital, which could further squeeze the housing market.

The new housing, which will cost an estimated £40 billion, is set to be built on land held by the Ulster Pensioners Trust (UPT) and is due to be completed in 2021.

The Belfast Telegraph reported in November that the new housing is set for completion in 2021 and will be funded by a UK government fund.

The Housing Secretary, Jonathan Bell, said the Government was investing in housing to help the country recover from the economic downturn, and the new projects would boost housing supply and build on the existing supply of houses.

The Ulster Pensioner Trust is currently planning to start building on its land in Belfast, which is expected soon.

In Dublin, the median rent is expected for 2020 to be £1.2, down from the £1 that was recorded in 2020.

A report by the Office for National Statistics (ONS) said rents in Ireland are forecast to fall 3.3% in 2019, but are projected to rise to 2.5% in 2024.

Rents are expected increase to 3.8% in 2025, the ONS said, adding that the increase will depend on factors such as inflation and the amount of new housing being built.

The report said that a number of factors are likely, including:a) the introduction of the Northern Ireland Housing Grant Scheme, which provides funding for new homes to be constructed in Northern Irelands territory, b) rising demand for new housing in the Northern Irish market, which the government hopes to benefit from, and c) the prospect of further reductions in tax receipts from the Northern Island housing market, such as the closure of the National Grid.

The Northern Ireland Land Reform (Northern Ireland) Act 2017, passed by the assembly in October, is expected later this year to give new powers to Northern Ireland’s housing authorities to allow new developments to go ahead.