UPDATE: MORE than 500 homes are isolated by flood waters on the outskirts of Shepparton.
The Goulburn River is believed to have peaked at 11.1 metres this morning and the State Emergency Service (SES) has not ruled out further rises.
About 20 isolated homes have already been flooded and up to 500 could be innundated with water if the Broken and Goulburn rivers converge.
"At Shepparton this morning we're seeing the peak right about now and we're expecting the river to be at that peak for quite some time," SES acting director of operations Tim Wiebusch told the Nine Network.
"Shepparton is one of those places that we refer to as flood alley; they have both the Goulburn River, the Broken River and a number of creeks that all come into Shepparton and that makes the prediction all that much harder."
In Victoria's west, Horsham residents remain on high alert as the Wimmera River gets closer to peaking.
Up to 20 properties in Horsham are under threat from flood.
Areas north of Horsham are threatened by flooding from Yarriambiack Creek, including towns such as Warracknabeal and Rupanyup.
Across the state more than 300 properties have been flooded and Premier John Brumby has suggested the damage bill will reach the tens of millions of dollars.
The State Government yesterday announced a ministerial taskforce to oversee flood recovery.
Up to 20mm of rain is forecast later this week for most of the state and up to 50mm in alpine regions but the weather bureau does not expect it to add to existing flood levels.
Authorities have urged residents of flood affected towns not to play in flood waters because of the potential for bacteria.
The Department of Health has also warned that pools of stagnant water are ideal breeding grounds for mosquitoes and there is a high likelihood of an outbreak of Ross River fever as floodwaters recede.
"While we have this flood emergency going on, the last thing we need is additional rescues of either people that have attempted to walk or ride through floodwaters or getting out and playing on their canoes and similarly people trying to drive through floodwaters," Mr Wiebusch said.
"There are a lot of contaminants in those waters at the moment, the river is closed on the Goulburn so if people do get on the river in boats or canoes or the like they can be fined."
