Queenstown residents feared the worst but were able to breathe a little easier yesterday after predictions a swollen Lake Wakatipu would inundate the central business area failed to come true.
Only a third of the predicted 150mm rainfall eventuated on Thursday night, but the risk of further flooding remains.
Otago Regional Council environmental engineering and natural hazards director Dr Gavin Palmer said the outlook was "good", but could change.
On Thursday, it was feared Lake Wakatipu would reach 312.2m yesterday, but it peaked at 311.46m at 5pm, before dropping slightly last night.
At 11pm, the rain had stopped and the clouds had broken up, hinting at a brighter day. The wind was pushing water on to the footpath between the retaining wall and Pog Mahones Irish Pub and Eicharts Hotel.
Dr Palmer said the lake needed to drop back to 310.9m to create a "safe zone".
Provided there was no further rain, that could take up to 10 days.
Further rain was predicted for Monday, but the latest information from the MetService was the rain would be confined to the West Coast, he said.
Queenstown Lakes District Council incident manager James Hadley said the lake was still being monitored. The biggest threat remained wave action caused by the wind.
A section of Beach St, between Thomas's Hotel and Minami Jujisei Japanese Restaurant - which was a puddle at 11.30pm on Thursday - was covered by ankle-deep water at 3pm yesterday.
Water beside the public toilets on Earnslaw Park, out to the lake was also ankle deep, while water lying on the reserve between The Bathhouse and the Novotel Lakeside Queenstown Hotel was about calf-level.
Mayor Clive Geddes said while the resort was "in a better position ... than we expected to be" yesterday morning, the danger had not passed.
"What we will continue to do is provide [people] with the information that will enable them to make their own decisions about how they deal with flood-protection measures. We will not be in any particular rush to remove any mitigation barriers."
Mr Geddes said there had been a minimal amount of damage, which appeared to be confined to the cobblestoned areas of Earnslaw Park and a small section by the stairs used to access Queenstown Bay, near the Kawarau Jet jetty.
It was not known what the cost to repair the damage would be.
Insurance claims from the devastating 1999 flood totalled $46 million.
Mr Geddes said the community was prepared this time, with about 70 tonnes of sand trucked in and used to fill bags before the lake began to spill.
"By midday [Thursday], the great majority of owner-operated businesses had their flood protection in place. A lot of the stuff people needed to do [to prepare for the worst-case scenario] was completed 12 ... to 20 hours before that flood event occurred."
Measures employed included shutters, sandbags and barriers.
