Footage on social media shows the twister sweeping through the West Coast town just after 11.30am, damaging property and sending debris swirling into the air.
At least one home has lost its roof.
Cobden resident Dave Ferguson said the strong winds left carnage in the West Coast town.
"Wheelie bins were flying up the road, rubbish was getting piled everywhere," Ferguson says.
"The wind was really intense. The wind was running sideways at a great rate of knots. I was quite worried about the windows around the house. It was quite out of the blue. Quite heavy to wake up to.
"I've experienced a few tornados on the coast over the years and it was up there with that sort of category. It was really tough.
"One of the beachfront houses lost their roof - the complete roof - and it went two or three blocks away into someone's backyard. Just carnage all over the Esplanade Road near the coast here - bits of trees and God knows what else. It was a really nasty time."
It was fortunate no one was injured, Ferguson says.
"A couple of the locals said . . . they saw it flying through the air, it was at a great rate of knots. Lucky no one got hurt."
The Grey District Mayor said damage was clearly visible where strong winds had whipped through the area.
Fire and Emergency said one crew attended a property that had its roof torn off in Cobden shortly at 8.45am.
Mayor Tania Gibson spoke to RNZ from outside the house and said most of the roof was in tatters.
"It's right down beside the sea, and unfortunately this one house has been severely affected, the roof has come off which is unfortunate because the lady is in her 90s," she said.
"It is an old A-frame house. A large portion of the roof has come off and all the inside of the house is wet.
"There was, I did see, a few fence palings off a house further up and the house in the back section [to the one that had its roof ripped off], it looks like there's some damage over the back, but it has remained quite isolated, so that's good to hear."
The elderly woman's family had arrived from Blenheim and were looking after her, she said.
The council had also offered her accommodation if she needed it, but she had made arrangements to stay with family, Gibson said.
Metservice is warning the South will endure a "short, sharp" cold snap over the next few days as a storm moves west across the country.
Forecaster Gerard Bellam said orange rain warnings had been issued for the period up until this morning for Fiordland, north of Doubtful Sound, and the Otago headwaters.
A road snowfall warning has been issued for the Crown Range Rd from 11pm tonight until 6am Tuesday.
Snow showers are possible down to about 800 metres, but little if any is likely to settle, the forecaster said.
IMost of Otago, including Dunedin, would likely get scattered rain over the next couple of days and Dunedin and Queenstown were forecast to drop to as low as 12°C tomorrow, he said.
"It’s going to be quite a bit colder throughout Otago, but this will not last too long, as a warmer northwesterly coming through the South Island will result in temperatures back in the mid-20s by Thursday."
Over the weekend there has been heavy rain in parts of the North and South Islands, as well as strong winds and fluctuating temperatures.
Heavy rain watches are in place for the Westland ranges, the headwaters of Canterbury lakes and rivers from Arthurs Pass southwards, central and western areas of the North Island and the ranges of eastern Bay of Plenty and Tairawhiti.
The trough will be accompanied by widespread strong or gale-force northwesterly winds, which will ease in the South this morning but affect central areas until tomorrow afternoon.
A strong wind warning is in effect for the Canterbury high country, with gusts expected to reach 120kmh.
Strong wind watches are also in force for Fiordland, inland Southland and Otago, and central and southern parts of the North Island, gusting 100kmh.
More warning areas could be added as the trough moves north, and existing watches could be upgraded, MetService said.
— Additional reporting RNZ/NZ Herald
