Photo: Fires destroyed at least 24 homes in and around Buchan last Monday. (Facebook: Buchan Caves Hotel)
Victorian Premier Daniel Andrews says at least 200 homes have been confirmed lost in the state's bushfires, but that number is expected to rise to 300 when assessment teams complete their work.
Police estimate 67,000 people fled the fires in East Gippsland and north-east Victoria, but all of those who were reported missing have now been found.
Mr Andrews told a press conference in Melbourne the Government would provide $50 million to set up a new agency, Bushfire Recovery Victoria, to be headed by former police commissioner Ken Lay.
He said the agency would be a permanent standing body to provide support across the state now and in the future, because the current crisis would not be the last.
Two people have been confirmed dead in the fires, which have burnt through more than 1.2 million hectares in the state's east and north-east.
For the first time in several days, no fires in Victoria are currently at emergency level, after two were downgraded this morning.
But more than a dozen watch and act messages are still in place, and Emergency Management Commissioner Andrew Crisp said people needed to remain vigilant.
The state is enjoying milder conditions today, but more dangerous fire weather is expected to return on Thursday.
Mr Crisp said the rain falling across fire-affected areas since yesterday was not making an impact on the fire.
"The fact we've been able to pull back from the emergency warnings to watch and acts reflects the suppressed fire behaviour we're seeing at the moment," Mr Crisp said.
"I say suppressed because it's not gone away.
"It is there waiting for the next hot day, the next strong wind — whether that's the northerlies or the southerlies.
"We know these fires will become dynamic and dangerous again."
Earlier, he said it was "inevitable" fires near Corryong would join up with fires across the border in NSW.
Emergency Services Minister Lisa Neville said while the rain falling across fire-affected areas was providing a sense of relief, she urged people to not become complacent.
"It is only January 6," she said.
"We have significant fires in the landscape.
"We've got other parts of the state drying out as we speak.
"So this is an opportunity for people to remain focused, listen to messages, listen to warnings.
"I know this is really hard and I know it's taking a massive toll on communities affected."
'This is the new normal'
Ms Neville said she had lifted an order which had given police the power to compel people to leave their homes, allowing people to return — but she warned similar orders were likely later in the week.
A state of disaster declaration remains in place until January 9.
"At this stage the Thursday, Friday do look like fire spike days," she said.
Authorities had hoped to fly about 300 people out of the fire-hit coastal town of Mallacoota today, but smoke has made this impossible.
Mr Andrews said more frequent and severe fires made a standing bushfire recovery agency necessary.
"As Ken said, this is the new normal," he said.
"We hope not to see this sort of unprecedented fire activity every year, but we're going to see more and more fires.
"And I think that probably means we're going to see more and more properties lost over time and we're going to be doing more and more rebuilding."
Mr Andrews said while the initial $50 million would start the agency's work, the recovery effort would cost "many hundreds of millions of dollars".
"It won't be $50 million, it won't be $500 million, it will be a lot more than that, but that's what we have to do."