With a large number of "absentee owners", there was concern that despite the wishes of permanent residents the votes cast by non-permanent residents would mean the supply would be upgraded - something they could afford but others might not.
The high number of holiday-home owners also drove up the area's deprivation rating, making it ineligible for any government subsides for an upgrade.
Although there was vocal opposition to keeping the supply open, when 92.7 per cent of eligible voters headed to the polls on September 29 only 11 people - or 21.6 per cent - voted for its closure.
In all 78.4 per cent of voters, or 40 people, voted against the closure. Legislation requires that when a water service is to be closed, a threshold of 75 per cent of votes cast is needed.
Wairoa mayor Craig Little said engineers were now working on a treated water system for the town.
He thought the community was feeling "pretty good" about the result.
"I thought the community was pretty well a 50/50 split, but obviously this shows it's definitely not. There's obviously a lot of people who want [the upgrade] out there who actually live out there full time, that was quite interesting.
"This is what we needed to guide us or tell us what to do . . . it'll be business as usual working on toward that now."
Mr Little had estimated the upgrade could cost between $500 to $800 per household, but yesterday said it could be more.
Wairoa's Long Term Plan 2015-2025 notes a sum of $200,000 was allocated for a treatment upgrade to the Mahanga supply before 2020.
The supply - which originates from a shallow bore - regularly returns contaminated samples, and does not meet the New Zealand Drinking Water Standards (NZDWS). It also lacks enough pressure to be suitable for firefighting - even though there are hydrants in the reticulation.