6 Best Lakeside Towns in Victoria
A submerged red gum forest breaks the surface of Lake Mulwala at Yarrawonga, one of the odder sights on any Victorian lakefront. Down in the Gippsland Lakes, Paynesville is cut through with residential canals, which is why locals call it the "Venice of East Gippsland." Bonnie Doon sits on Lake Eildon with a population you could fit in a couple of buses and a place in national memory thanks to one 1997 comedy. Tallangatta occupies ground it only moved to in the 1950s, after the old town went under the water. These six towns share a shoreline and little else, which is what makes them worth grouping together. Each puts its lake to a different use.
Yarrawonga
Lake Mulwala is a reservoir on the Murray River, and the drowned red gum forest standing in its shallows is Yarrawonga's signature. Anglers work the timber for Murray cod, while kayakers, swimmers, and paddle-steamer passengers use the open water. This is a town of 8,661 people, per the 2021 Australian Bureau of Statistics Census, big enough to keep golfers, boaters, and wine tourists busy without feeling crowded.
The waterfront has foreshore parks, walking paths, and picnic areas, and the P.S. Cumberoona runs cruises out onto the Murray. A few minutes from town stands Byramine Homestead, built in 1842 for Elizabeth Hume, the widowed sister-in-law of the explorer Hamilton Hume, who helped establish her on the run. The octagonal house sits alongside a brewery and cellar door. The Rutherglen wine region lies within an easy drive, and koalas turn up regularly in nearby Barmah National Park. Golfers have the Yarrawonga Mulwala Golf Club Resort, one of the larger regional courses in the state.
Bonnie Doon
About 666 people live in Bonnie Doon, according to the 2021 Census, and most Australians know the name for one reason. The 1997 film "The Castle" sent its Kerrigan family here on holiday, and the town has been shorthand for "serenity" ever since. Beyond the pop-culture footnote, Bonnie Doon sits on Lake Eildon, one of Victoria's largest reservoirs, in the High Country north of Melbourne.
There is no long promenade here. Instead the town has scattered access points and recreation areas around the water's edge, where boating, fishing, and kayaking dominate. Warmer months bring water-skiing, wakeboarding, and lakeside camping, and the surrounding bushland and trails draw horse riders into the hills.
Away from the water, Peppin Ridge Estate serves its wines with the High Country as a backdrop, and the Bonnie Doon Lookout opens onto views of the lake and the countryside around it. The small Bonnie Doon shopping strip has boutiques, hobby shops, and the occasional pop-up rather than chain stores, which suits the pace of the place.
Daylesford
Daylesford's lake is the quiet member of this list. Lake Daylesford is a small body of water near the town center, ringed by a walking loop, picnic spots, and a jetty, with no boat ramps and no wake. People come to this central Victorian town of about 2,781 residents for what sits around the lake: day spas, wellness centers, and the mineral water the region is built on.
At the Hepburn Mineral Springs Reserve, commonly cited as Australia's first mineral springs reserve when it was set aside in 1865, visitors can fill a bottle straight from the pumps. At the Wombat Hill Botanic Gardens, the kitchen garden is thick with herbs, vegetables, and fruit through the warmer months, with benches set under the kiwi vine and among the olive trees. Most of the boutiques line Vincent Street, and The Convent Daylesford, a former nunnery on the hill, now displays contemporary and traditional art across its old rooms.
Metung
Metung occupies a narrow peninsula in the Gippsland Lakes, with Lake King on one side and Bancroft Bay on the other. The result is water on nearly every side and the feel of a holiday village that never quite filled up. The 2021 Census counted about 1,899 residents.
A boardwalk traces the shoreline, good for watching yachts work in and out of the bay. Boating and fishing are the main pursuits, and cruises run out into the wider Gippsland Lakes system from the local jetties. Cafes and seafood spots cluster near the water, alongside a handful of galleries.
Two stops are worth planning around. The Metung Hot Springs opened above the town with mineral pools and saunas looking out over the water, and the Metung Hotel, the pub on Bancroft Bay pictured above, has drawn visitors and locals to the waterfront for generations.
Paynesville
Water wraps Paynesville on three sides, between Lake King and Lake Victoria in the eastern Gippsland Lakes. The nickname "Venice of East Gippsland" comes from the residential canals cut through the town, where boats sit tied up at the ends of suburban streets. The 2021 Census recorded 3,636 residents.
With its canals and a natural harbor, Paynesville is a genuine boating town, and sailing, fishing, and cruising are all part of daily life. Foreshore lawns, sandy stretches, and walking paths line the waterfront for anyone on foot. A short ferry crosses to Raymond Island, home to one of Victoria's larger wild koala populations, where an easy walking loop offers a real chance of spotting them overhead.
The Paynesville Maritime Museum covers the town's boating and fishing history in a compact space. For dinner, SARDINE Dining sits right on the water, its outdoor tables looking across to Raymond Island.
Tallangatta
Tallangatta is the town that moved. In 1956, engineers relocated the entire township several kilometers west to higher ground so the expansion of Lake Hume could flood the original site, which now sits underwater. When lake levels drop, old foundations and remnants surface again. About 1,175 people live in the rebuilt town today, backed by the rolling hills of the High Country.
The relocation left a mark you can still read in the streets: the civic buildings and shops put up in the mid-1950s share a coherent mid-century look unusual for a country town. The Tallangatta and Districts Heritage Museum covers the rest of the story indoors.
Lake Hume is the center of the town's outdoor life. The Tallangatta Foreshore has parks and picnic areas along the water, and the High Country Rail Trail runs from here along the shoreline for walkers and cyclists. Its standout feature is the 600-meter Sandy Creek Bridge, a former rail crossing rebuilt in 2012 with red poles arching over its length, spanning a wide arm of the lake.
Six Lakes, Six Different Answers
What ties these towns together is a shoreline; what separates them is how people use it. Yarrawonga is built around golf, water sports, and the strange beauty of a drowned forest. In Daylesford, the lake is a place to walk between spa appointments. Metung and Paynesville sit on the Gippsland Lakes and revolve around boats, while Tallangatta holds a history no other town on this list can match. Pick the lake that matches the pace you want, and the town usually follows.
