Residents of Duncan, B.C., rescued a car from the flooded streets Friday.Residents of Duncan, B.C., rescued a car from the flooded streets Friday. (CBC)

An evacuation order has been lifted for hundreds of south Vancouver Island residents forced from their homes by flooding.

About 300 homes were evacuated Friday when a state of emergency was declared around parts of Duncan, B.C., about 60 kilometres north of Victoria.

More than 150 millimetres of rain hit the community in 24 hours and the Cowichan and Koksilah rivers spilled their banks Friday morning. Water streamed around a network of dikes that were built in the 1960s, when flatlands in the city and surrounding communities were routinely flooded.

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Cowichan Valley Regional District spokesman Joe Barry said all residents were allowed to return to their homes on Saturday, although the state of emergency had not yet been lifted.

Area officials said the dikes are holding and water levels are dropping. Crews are also continually pumping water from flooded areas.

While rain continued to fall in the region on Saturday, B.C. Environment Minister Barry Penner said more flooding is not expected.

"We expect the trend will be for the rivers to either stabilize or continue to decline slowly," Penner said.

He said the flooding was caused by a combination of heavy rains, rising freezing levels and snow melt.

"The river crested at almost the same time as the high tide occurred," Penner said in an interview Saturday. "We don't expect to see that combination of events tonight or tomorrow."

There is no word yet on the extent of the damages, but some residents reported water levels rose "up to their doorknobs" on Friday.

While residents were allowed to return home, some will have to stay in hotels or with friends and relatives for the next few days due to the extensive damage caused by the rising waters.

On Friday, the province said it had approved funding through its Disaster Financial Assistance Program for areas impacted by the flooding. The program covers up to 80 per cent of the portion of a claim that exceeds $1,000 up to a maximum of $300,000.