The boy replied that the family member thought he was out with friends.
The offences are said to have taken place in a Wairarapa park.
All information that could lead to the boy's identification - including the names of his family members - was suppressed.
Defence lawyer Peter Stevens, applying for bail, said the court needed to look at the strength of the case against the charges.
Mr Stevens read a statement made by a friend of one of the alleged victims.
"[She] came over to me and said that she'd had sex with [him]. I didn't know if she was telling the truth because she was laughing. I asked her if she wanted to, she said that she did want to, she wasn't upset or anything, she was fine.
"She kept saying that she wanted to have sex with him ... she told me yesterday that she was still texting him. I was really surprised when I heard that she was saying she was raped."
Judge Ellis said: "[And] that makes it okay?"
Prosecuting Sergeant Garry Wilson said the investigation was ongoing. "Initial inquiries have been made with the evidential video interview."
Mr Wilson opposed the boy's bail.
"The parents of the girls have been canvassed. They both express desire that he is not released at large, back into the Wairarapa community. He knows where they go to school."
Mr Wilson said one of the girls had stopped going to school after the alleged incident but had recently started attending again.
"[The parents] are concerned that the [girl] will go back to not wanting to go to school [if he's released]."
Mr Wilson said the boy could also be at risk of retaliation from the community.
Judge Ellis denied bail and remanded the boy in the care of Child, Youth and Family until December 5, on both charges.
"I'm not suggesting, or accusing him, that he would approach or intimidate these girls but they are children. One of them is a primary school child, they are not responsible for what he has done or not done.
"The welfare of these children ... must be the first consideration ..."
