Homeowners in the southern state of Victoria raced to defend their properties from swollen river systems, as police in the northeastern state of Queensland found the body of another flood victim in the town of Grantham.

The hub of Horsham, which lies about 300 kilometres (190 miles) northwest of the Victorian state capital Melbourne, is expected to be one of the worst-hit towns in the region, where more than 40 villages have already been affected.

"It's predicted to be a one-in-200-year event," a Victoria emergency services spokeswoman told AFP as rivers burst their banks following heavy rains fuelled by a strong La Nina weather pattern.

"We are expecting the town will be cut in half by the river and that the highway be cut as well."

The floods have hit Victoria after a parched decade in the state and Deputy Premier Peter Ryan told the AAP news agency the damage to crops could run to hundreds of millions of dollars.

"For many people of course they were looking at this season only a few weeks ago as being the way out for a lot of them from literally years of despair in the course of drought," AAP quoted him as saying.

"They then weathered the nightmare of the locusts and only now they have to stand on the front verandah and look out over these paddocks that are covered in water and somehow it's just not fair."

The Wimmera River, which bisects Horsham -- a town of 14,200 people -- and is also threatening another 12 small towns, is expected to peak on Tuesday and many residents sandbagged some of the 400 homes at risk.

The properties predicted to be hit include some of the town's most expensive houses, fronting the river, and some residents began to evacuate their homes, AAP reported.

"People who live in the direct line of the flood are pretty nervous because it's never happened before," said Mayor Michael Ryan.

More than 1,600 properties have been affected by flooding across Victoria after it was inundated by water at the weekend, as the country continues to be swamped by summer floods that have killed at least 31 people in Queensland.

At least 20 people have died since a flash flood described as an "inland tsunami" last week devastated a valley west of the Queensland capital Brisbane, uprooting entire houses and hurling cars through the heaving waters.

Brisbane itself was devastated by flooding when its main river burst its banks on Thursday, while floodwaters affecting an area the size of France and Germany combined covered the eastern state.

Queensland premier Anna Bligh said Brisbane, home to two million, was now back in business as a civilian army of volunteers helped locals rip up carpets, remove sodden ceilings and walls and throw out reeking and soaked furniture.

Announcing an inquiry into the disaster, she said: "The last three weeks have been truly shocking for all Queenslanders and now is the time to forensically examine the devastating chain of events and the aftermath."

Australia's Treasurer Wayne Swan said the Queensland deluge, which destroyed thousands of homes and businesses, disrupted valuable coal exports, wiped out crops and washed away infrastructure, would have a massive economic cost.

"It looks like this is possibly going to be, in economic terms, the largest natural disaster in our history," Swan told state broadcaster ABC, adding that it was too early to put an accurate figure on the impact.

"It will involve billions of dollars of Commonwealth money, and also state government money, and there's going to be impacts on local government as well."

Swan also said the floods in major coal producer Queensland, which analysts said could more than double the price of steelmaking coal to a record $500 per tonne, could also affect the cost of living for Australians.

As rescuers continued the grim task of picking through the ruins of towns in the Lockyer Valley west of Brisbane for more bodies, Bligh warned that the reality of the floods had yet to hit many people.

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