At around 3:30 p.m. the spout appeared 500 meters from the coast of Van Hung Commune.
"The water spout moved fast and lasted around 3-4 minutes," Thuy Diem, who witnessed it, said.
"It capsized several boats before making landfall and dissipating."
Locals said waterspouts appeared in the region two years ago, but dissipated over the sea.
Tran Trung Thong, vice chairman of the Van Hung Commune People's Committee, said the tide was when the spout appeared.
"Luckily, [it] did not result in human casualties."
The National Center for Hydro-Meteorological Forecasting said it has been raining in Khanh Hoa for several days, making tornadoes possible in coastal areas.