Business owners have spoken of their devastation after flooding in Newry city centre damaged several buildings and ruined shop equipment and stock.
The streets around Newry City Hall were among the worst hit areas when Newry Canal burst its banks overnight.
Roads were also flooded in other parts of County Down and County Armagh.
A yellow weather warning for heavy rain is in place until Wednesday at 09:00 GMT.
This would be affecting already "very saturated ground", Paddy Lavery from the Department for Infrastructure told BBC News NI.
He said crews faced a challenge to deal with the flooding.
"We have measurements on the rivers, loughs, tides and we haven't seen this before," he told the Evening Extra programme.
"This is an area we haven't dealt with. We have a finite resource. Where is the water to get away to?
"We are resorting to providing sandbags to protect properties," he said.
Mr Lavery said water levels were "unprecedented" and four roads had been affected by landslips.
Train lines and bus services were also affected by the weather conditions, with more heavy rain expected in the coming days due to Storm Ciarán.
McCartan Bros, a family-run clothes shop on Sugar Island in Newry, sustained thousands of pounds worth of damage, according to its owner Paul McCartan.
Some people paddled a boat along the road outside his store, as the businessman tried to salvage what was left of his stock.
Mr McCartan told BBC News NI that the damage will run into thousands of pounds as his shop was full of new items, ready for Christmas.
The store has been operating in Newry for 64 years, having been founded by his father and uncle in 1959.
But it currently has no flood insurance as many businesses in the area cannot get cover for flood damage.
Thank you to everyone for your kind words and support. This will take some time to process but we’ll be back thanks to the strong community we have around us. If your home or business has been affected our thoughts and wishes are with you too. pic.twitter.com/iBuuqM3zYW
— McCartan Bros Newry (@mccartanbros) October 31, 2023
The store was also closed for refurbishment this month, with new flooring and toilets installed.
Mr McCartan said part of that new flooring came floating past him as he forced his way into the building to try to salvage any dry stock that he could.
He estimated it could take four to six months to fix the damage.
On Tuesday evening, police urged the public to avoid the canal and the river "due to the hazardous conditions caused by high water levels and the fast flowing current".
It is understood part of the wall at Merchant's Quay collapsed, allowing water to seep through.
In Dundonald, near Belfast, some patients at the Ulster Hospital had to be moved after a rainwater pipe became blocked, causing water damage to a small number of rooms.
Some roads have also been impassable in places including Killowen, Camlough, Moira, Ballynahinch and Bangor.
'Flooded to waist-level'
Brendan Downey, director of the Friar Tucks fast food firm, said the damage to his Sugar Island restaurant in Newry was catastrophic.
"Everything is destroyed. We're tried our best to save the machinery and stuff but there was no hope," he told BBC News NI.
"An army of men wouldn't have sorted it out last night - we had lorry-loads of sandbags."
All eyes on the tide
Catherine Morrison, BBC News NI reporter in Newry
Newry is a city of sandbags.
Thousands of them, possibly as many as 10,000, are lining the banks of the canal and the river.
Many are piled up outside businesses, in an attempt to keep the waters at bay.
It is not currently raining, although a weather warning for rain kicks in again at 21:00.
Even if the rain levels aren't as high as earlier, there's a fear that due to the already sodden ground, further damage could be caused.
All eyes are on the overnight high tide, expected after midnight.
At Merchants' Quay in Newry, Brian McCullagh's firm, BMC Accountants, is among the buildings which filled up with water. He said it was "quite devastating".
"The basement is flooded to waist-level," he told BBC News NI.
"Although we went paperless a few years ago, all the old files are still down there and so there's been a lot of damage.
"I spent a lot of money on a listed building from 1820 and we came in this morning to find it flooded completely in the basement."
The building, Commercial House, is just feet away from Newry Canal and Mr McCullagh said businesses in the area could not get flood insurance.
Killowen in County Down recorded 75.4mm of rain between 09:00 on Monday and 09:00 on Tuesday, the wettest climate day on record for that station since data was first collected in 1997.
The wettest day on record for Northern Ireland was 31 October 1968 when 158.9mm fell at Tollymore Forest, County Down.
There are two weather warnings in place in the coming days.
The warning which ends at 09:00 on Wednesday is in place for the whole of Northern Ireland, with the Met Office expecting 15-20mm of rain in many places.
From 06:00 on Thursday until midnight on Thursday there are yellow warnings for County Down, southern County Antrim and parts of County Armagh, when Storm Ciarán is expected to bring some heavy rain to eastern areas.
— Richard Mckee (@mckee1690) October 31, 2023
Eamonn Connolly, manager of Newry's Business Improvement District organisation, said the flooding was "incomprehensible" and he had never seen the water levels so high.
"It's almost in biblical proportions in some places," he said, adding that several businesses were looking to see if they could open elsewhere.
"It's very bleak and unprecedented," he said.
Newry and Armagh councillor Oonagh Magennis said severe flooding was "causing havoc throughout the area", including Camlough village in south Armagh.
Video footage on social media showed flooding in the forecourt of Camlough's biggest shop and petrol station.
Three horses were rescued by firefighters in the village after they were stranded by floodwater.
Their owner, Gary Murphy, said they had been left shaken.
"I came down here yesterday for feeding and the place was flooded, I couldn't get at them," he said.
"They were stressed out, they were stranded. Just a wee small island was all they had. And the water was just rising, rising, rising."