When it appeared the mooring rope was about to burn through and the breeze would push the boat into a bank thick with dry bamboo, and with homes nearby, the owner and a firefighter rowed out to cut the rope and pull the still blazing wreckage toward the beach.
The owner said he had spent a year searching for his dream boat for family outings in the Bay of Islands.
He finally found the launch in Auckland two months ago and had been out on it almost every weekend since.
On Thursday morning, he had prepared the boat for another outing with his family, which was to have begun on Friday.
The hardest part was going to be telling his children they had lost all their belongings that had been on board, he added.
The blaze was most likely caused by a build-up of gas, or fuel vapour in the cabin, says fire investigator Craig Bain.
The gas or vapour could have been ignited by a spark produced when the fridge, or bilge pumps kicked in.
The investigation was continuing, he said.