Queensland Premier Anna Bligh says many people in Brisbane will wake on Thursday to scenes they had never seen in their lives.
However, fears that the flood peak would rival the fatal floods of 1974 have eased. The Brisbane River is now expected to peak well below the level initially feared.
The death toll in Queensland stands at 14 on Thursday.
We are now seeing thousands of homes inundated with water up to the roof, said Ms Bligh. Many, many more are expected to see significant water damage.
Although the flood peak could be below the level of the 1974 flood, Ms Bligh said:
This is still a major event, the city is much bigger, much more populated and has many parts under flood that didn't even exist in 1974.
We are still looking at an event which will cripple parts of our city.
People need to brace themselves, said Ms Bligh.
She said 20,000 to 30,000 people would be affected in Brisbane.
Brisbane Lord Mayor Campbell Newman said he had a sense of horror and awe about the power of the river.
He says the situation will only get worse. At least 35 suburbs are inundated.
CBD now vacant
Central Brisbane is still in danger as the flood's peak early on Thursday will coincide with a high sea tide. The ABC reports the CBD is vacant.
Several bridges and the Riverside Expressway are closed, cutting the city in half.
South Brisbane and West End districts are already badly hit, according to the Courier Mail newspaper. More than 50 suburbs and 2100 roads could be left under water.
However, the BBC reports the Wivenhoe and Somerset dams have reduced the amount of water they were being forced to release to ease pressure, and this should cut the overall flood peak.
The ABC reports the Brisbane River reached 4.2 metres on Wednesday.
The Bureau of Meteorology says the river will peak just below 5 metres at around 4am (AEST) on Thursday.
Thousands of houses in some suburbs have waters past the second-storey.
Ms Bligh says the flood situation would have been significantly worse if the Wivenhoe Dam had not been built after the 1974 floods.
She says almost twice as much water is flowing through the catchment feeding the Brisbane River than in 1974.
The ABC reports more than 3500 people are in evacuation centres in Ipswich and Brisbane. Some said say they felt like refugees in their own city.
Ipswich downgrade
The expected flood peak in Ipswich has been downgraded. More than 3,000 homes and businesses were swamped in Ipswich as the Bremer River moved towards a peak of 19.5 metres.
Mayor Paul Pisasale says earlier predictions suggested the river would reach 22 metres.
That's three metres less and it's that three metres that would have caused a drastic situation, he said.
The revised level is below the 1974 flood level.
