Victoria is entering 2026 with less water in storage, higher household use and a drier climate outlook, according to the newly released Victorian Annual Water Outlook 2026. The report provides a statewide snapshot of water availability, climate risks and likely pressure points for urban and regional systems over the next 12 months.
After a year of below-average rainfall across much of the state, total water storage levels have dropped to around 60 per cent, down nearly 20 per cent compared with the same time last year. While late spring rain provided some short-term relief, the Outlook warns that Victoria is entering summer with less buffer than in recent years.
For water managers, policymakers and customers alike, the message is clear. Water security cannot be taken for granted, even in systems that remain relatively well supplied today.
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Melbourne secure for now, but trends point downward
Greater Melbourne’s storages remain comparatively strong, sitting at just over 75 per cent capacity. However, that figure represents a decline of around 12 per cent year on year, marking the steepest annual fall since the Millennium Drought.
From July 2024 to June 2025, inflows into Melbourne’s storages were more than one-third below the long-term average. At the same time, daily household water use increased to 169 litres per person, up from 163 litres the previous year, driven by hotter conditions and continued population growth.
Yarra Valley Water Managing Director Natalie Foeng said the current situation shows how quickly conditions can change.
“Our storages are secure today, but this year’s sharp fall shows how quickly they can drop in dry conditions and when rainfall is low,” Foeng said. “By using water wisely now, we can avoid or delay restrictions and protect supplies for our growing city.”
A 50 billion litre desalinated water order placed in 2025 has played a critical role in slowing the decline. Without it, the Outlook indicates Melbourne’s storages would have continued falling through winter and spring, when they typically refill.
Regional systems under increasing pressure
While metropolitan Melbourne is unlikely to face water restrictions in 2026, the picture is less certain across regional Victoria. Total regional storage levels are sitting at around 57 per cent, down more than 20 per cent compared with last year.
Several towns have already experienced restrictions for the first time in five years, and the Outlook identifies a higher likelihood of restrictions across many regional systems under dry or worst-on-record climate scenarios. Smaller, run-of-river systems and communities reliant on limited local catchments remain the most vulnerable.
The Outlook also highlights growing pressure in parts of western Victoria and Geelong, where below-average rainfall has combined with population growth to increase demand on already stressed supplies.
Climate signals reinforce the need for efficiency
Seasonal climate modelling points to a summer of above-average temperatures and a higher likelihood of below-average rainfall across much of Victoria. Over the longer term, the Outlook confirms a continued warming and drying trend, with declining winter and spring inflows and higher evaporation rates expected to persist.
These trends underpin the Victorian Government’s emphasis on water efficiency as a core part of water security planning. Permanent Water Saving Rules remain in place statewide, regardless of whether formal restrictions apply.
These rules include limits on garden watering times, requirements for trigger nozzles on hoses and restrictions on hosing hard surfaces. They are designed to embed efficient water use as a baseline behaviour, not just a drought response.
Simple actions can slow the decline
Alongside system-level planning, the Outlook reinforces the role of households and businesses in reducing demand. Targeting shorter showers, running full appliance loads, fixing leaks and choosing drought-tolerant landscaping can collectively make a measurable difference.
The Outlook also flags that Melbourne’s water corporations will provide quarterly updates through 2026, offering transparency on storage levels, usage trends and any emerging risks.
As Victoria faces a hotter, drier future, the Annual Water Outlook serves as both a warning and a planning tool. It underscores that desalination, infrastructure investment and long-term strategies matter, but so too does everyday water use across homes, businesses and communities.