The bodies of two Chinese backpackers who went missing in floodwaters in Queensland have been recovered, Australian police have said.

The 26-year-old man and 23-year-old woman, who were driving from Brisbane to the North Burnett region, were reported missing on Tuesday when they failed to reach their destination.

Police said they had found their silver Subaru Forester near the town of Kilkivan near Gympie on Wednesday afternoon, after a largescale search by officers, the State Emergency Service and helicopters.

On Thursday they said two bodies had been found inside the vehicle, which was submerged in floodwaters. Next of kin had been notified and police were working with the Chinese consulate.

Gympie mayor Glen Hartwig said the two deaths were an "absolute tragedy".

"These people have come to Australia to see our beautiful country… and tragically they've ended up losing their lives," he told the ABC.

There have been major flood warnings in place across Queensland and parts of the Northern Territory (NT) over the past several days, with some river levels still increasing due to heavy rain.

Hundreds of homes have been flooded in towns including the Queensland coastal town of Bundaberg, and Katherine in the NT. Crocodiles have been spotted in some floodwaters with residents warned to stay out of them.

In Darwin, people have been asked to reduce water consumption and boil drinking water after the pump station at the dam that supplies most of the city's water was flooded and stopped working.