Victoria will introduce new building controls and a flood hazard rating system identifying “very high-risk” areas where development must be avoided.

In “high-risk” flood areas, any planned development will undergo careful assessment.

The changes will give insurers timely flood risk information to help “make insurance premiums more transparent” and will “deliver high-quality houses in the right places ... mitigating the impacts of climate change”, state Building Minister Harriet Shing said.

Melbourne Water will release updated flood mapping for Greater Melbourne over the next two years and undertake community engagement.

The state government says insurers “often apply a blanket approach” to flood risk by raising premiums for an entire community when only one area faces an elevated threat.

“We’re providing better information and more clarity to councils, industry and communities, so we can manage flood risks while building the homes that Victoria needs,” Planning Minister Sonya Kilkenny said.