Nine people were plucked to safety from their struggling hot air balloon in a dramatic water rescue carried out by a family on the Australian coast.

The balloon passengers clambered out of the basket and onto the front of a boat that 18-year-old Jack Abbott and his father were using on their wakeboarding trip near Melbourne.

The teenager told a local broadcaster he had sprung into action after seeing the balloon descending over the water, apparently unable to regain its lost altitude.

‘Dad said, you need to come in now, we're going to get this hot air balloon',’ the teen told Channel Nine.

Video footage showed the balloon's basket descending gently onto the bow of the pleasure boat to allow passengers to clamber off.

‘The first lady was quite distressed when she came off, then we took it two passengers at a time to account for the weight ratio,’ said Abbott.

Complicating the rescue was the fact that every time someone got out of the basket, the balloon got lighter and would lift off the boat.

All nine passengers emerged from their dramatic ordeal unscathed, but clearly relieved.

The balloon had taken off from a park on Saturday morning but had been unable to land at its intended destination.

Reports said a gust of wind had pushed it out over the water at Port Phillip bay.

The chief executive of the ballooning firm said it was only the second time in two decades that such an incident had taken place at his company.

‘Pete (the pilot) was coming in over a light pole so he had ascended to avoid the light pole, obviously,’ Picture This Ballooning's Damian Crock told the Age newspaper.

‘But then he's just effectively gone off to the side of the desired landing site and ended up over the water.’