As the search continues for the 52-year-old Katikati man missing in Tauranga Harbour a local fisherman has spoken of how he found the man's children cold and shaken on Matakana Island.

The 52-year-old Katikati man went missing when the boat he was in with his two children, aged 15 and 23, seven-year-old grandson and 14-year-old family friend capsized in Bowentown around 5.30pm last night.

The aluminium runabout was recovered from Tauranga Harbour today.

The group of young people managed to swim to shore at Matakana Island but the 52-year-old has not been seen since.

Fisherman Warren Coffey was heading out fishing with ex-colleague Peter Besley when he noticed a boat was upside down and went to investigate. He then noticed a group of young people waving from the shoreline of Matakana Island.

'I wasn't too sure whether they needed saving, but they started waving their arms.

'We went and picked them up and took them to shore and called emergency services.”

Warren says the children were cold and shivering, but were talking which was a good sign. They had recognised Peter as he teaches at Katikati College.

When asked whether there was anyone else still remaining in the water, they replied yes which sparked the search and rescue operation, says Warren.

The 52-year-old Katikati man was on a family fishing trip with his 15-year-old son and 23-year-old daughter, a seven-year-old grandson and a 14-year-old friend of the teenage boy when a rogue wave caused the boat to capsize.

Waikato Police Search and Rescue Squad Sergeant Warren Shaw says only the 7-year-old was wearing a lifejacket, but there were other lifejackets on board.

Warren says the sea conditions were rough when the group went out yesterday, but the man was competent at sea.

'He was a very experienced boatie and very experienced in this area.”

The group were treated by ambulance staff before being taken to Tauranga Hospital last night, while the TrustPower TECT Rescue Helicopter and two rigid hull inflatables from the local surf club were launched to commence a search of the water.

This morning search and rescue teams recovered the aluminium runabout carrying the family.

Waikato Police Search and Rescue Coordinator Constable Dave Pitchford says an extensive search of the inner harbour, involving the Auckland based Police Eagle helicopter and local Coastguard and Surf Life Saving vessels, took place this morning while Land SAR volunteers and Mine Rescue members conducted a shore search.

"The submerged boat believed to have been carrying the five people was located by a local boatee this morning and our plan is to continue the search through to this evening and then reassess our activities for tomorrow.

"At this point in time Waikato Police would like to thank all the individuals and organisations involved in the search. It is during trying times such as these that the true strength of communities can be seen."