Locals told the Herald Sun they awoke when heavy rain and the screeching of metal sheets could be heard outside.

Leah Lavelle, of Pine Cres, said she heard the strong wind and flying rubbish bins.

"Rain was crashing on the window and the wind picked up all of a sudden," Ms Lavelle said.

After the wind had stopped, she went outside to see what had happened.

It was then when she saw a funnel like a tornado, less than 100m away at the Mordialloc-Chelsea Secondary College.

"The clouds were pretty low, it was dark but the lights at the school highlighted it," Ms Lavelle said.

"I had never seen anything like it."

Ms Lavelle's mother, Terry, and father, Kevyn, were also up during the storm, fearing the worst for their house of 19 years.

An inspection after the freak storm found tiles had been ripped off the roof, leaving a hole which was later covered by Chelsea SES crews.

The secondary college across the street was also severely damaged, with roofing ripped off and windows smashed.

But the worst damage was done in Mordialloc, where several buildings in the industrial estate were torn apart, including a car wreckers, where the front brick wall collapsed.

Another building in Governor St was also badly damaged, with all of the second-storey windows shattered and a couch left upside-down in the car park.

It is thought to have been sucked out of the office.

SES controller Ron Fitch said he was called to help the storm victims after what he described as a mini-tornado.

"It has come through at Aspendale beach before going through and damaging houses in a strip which is about 500m wide," Mr Fitch said.

He said about 12 houses, and just as many industrial buildings, were affected.

Bureau of Meteorology senior forecaster Scott Williams said he thought the storm sounded like a water spout, which were sometimes seen in Port Phillip Bay.

But Mr Williams said water spouts normally occurred in autumn, with warm days and cold nights.

Temperature changes and differential air masses are their causes.

"It also comes of a surprise because nothing showed up on our radars," Mr Williams said.

He also said water spouts only occurred in costal areas and did not travel far inland.

Today's weather forecast is for more rain with south-westerly winds.

The same is predicted for tomorrow morning before the weather clears, with fine days forecast until the weekend.