This led one person to remain on board, while the other rowed a dinghy to shore before walking five hours to French Pass to raise the alarm.
The Coastguard then rescued the person still aboard the stricken yacht and took them to Okiwi Bay as the weather deteriorated where they were reunited with the crew member, who had raised the alarm.
Police thanked the Coastguard as well as French Pass and Okiwi Bay residents for their help during the operation, but urged New Zealanders to take care on the water.
"This dangerous situation could have been avoided had the yacht been equipped with a Marine VHF radio or emergency communication device," police said.
"Police remind people heading out on the water to take some simple steps to protect themselves and others."
Police also pointed to another incident on Christmas Day in which a search and rescue operation was mounted for no reason.
It took place when a person was reported missing in the Motueka River, south of Nelson, triggering the Tasman Bay Swift Water Rescue team, a local jet boat operator, Fire and Emergency NZ and Police volunteers to be scrambled.
However, the missing person was later found to have returned home, having left the area without letting their friends know, police said.
"Search and rescue staff put their lives on the line when searching for people, and ultimately everyone out in the water needs to take responsibility for themselves and young ones," police said.
That meant taking proper safety precautions and communicating.
One of the most common hazards this Christmas has been pool inflatables.
Northern lifeguards saved 13 lives and worked 720 hours on Boxing Day and blame the inflatables for the blow up in incidents.
A Surf Life Saving spokesman says the popular Christmas present holds many risks, especially for children who are quickly being pushed out of their depth when offshore winds are blowing.
Northern Region chief executive Matt Williams said inflatables were made for the pool - and instagram - but not the beach.
"Just like you wouldn't ride the jet ski in the pool, you wouldn't use inflatable pool toys in the ocean," he said.
Young children and teenagers don't expect to end up in trouble when using the inflatables but quickly get into a panic when they drift far from shore.
"They wanted to just float in the sea, take some insta shots on their inflatable unicorn or swan and then unknowingly they end up 400m in the sea, in the panic situation," Williams said.
"They [inflatable toys] are great for insta shots but not so great for the beach and surf environment."
In November, four teenagers were blown 3.5km offshore from a Gisborne beach after playing in two inflatable kayaks and an inflatable raft.
The teens were lucky to be able to call for help from a Surf Life Saving team having kept a cellphone in a water-tight bag.
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