Floods rebuilding could take years

Queensland faces a massive reconstruction effort as it prepares to rebuild itself after major flooding.

The waters in Australia's third-largest city have peaked below feared levels but Brisbane and other regions face years of rebuilding.

The capital of Queensland resembles a muddy lake, with an entire waterfront cafe among the debris washing down the Brisbane River.

Around 118,000 buildings have been hit with a power cut while 12,000 homes have been flooded.

Residents have been using boats to move about the flooded streets where traffic signs peeped above the stagnant water.

"It's a swimming pool," said Ian Parker as he walked in ankle-deep water through his house, which sits on stilts but looked like it was afloat.

As dawn revealed the overnight devastation, Queensland Premier Anna Bligh said: "What I'm seeing looks more like a war zone in some places.

"All I could see was their rooftops, underneath every single one of those rooftops is a horror story," she told reporters after surveying the disaster from the air.

"This morning as I look across not only the capital city, but three-quarters of my state, we are facing a reconstruction effort of post-war proportions," Bligh said.

An emotional Bligh said her state, reliant on farming and mining in rugged outback regions, would recover regardless of the cost and estimates that three quarters, an area the size of South Africa, was now officially a disaster zone.

Officials warned of the real risk of further severe flooding in the coming weeks, with two months of the wet season ahead and already overflowing dams requiring seven days to empty to normal levels to cope with more heavy rains.

The Bureau of Meteorology said a storm in the Coral Sea off Queensland's north coast was expected to form into a cyclone, but while it would bring fresh rains to Queensland it was expected to move away from the coast.

Queensland has received so much rain in the past two months the ground is fully waterlogged and dams are full.