Born on the Hukatere Peninsula in Kaipara Harbour, New Zealand, where his family ran a farm, Coates took on significant responsibility at a relatively early age because his father suffered from bipolar disorder. He received a basic education at a local school, and his well-educated mother also tutored him. He became an accomplished horseman, although an accident left him with a bad leg for the rest of his life. The large Māori population of the area meant that Coates grew up proficient in the Māori language.