HONG KONG: Hong Kong home prices rose 1.1 percent in the week ended January 10 to the highest in almost 12 years, Centaline Property Agency Ltd said in a report released on Friday.

The Centa-City Leading Index, a weekly measure of existing home prices, rose to 74.87, the highest since March 1998, according to figures from Centaline, one of the city's biggest real estate agencies.

The index has been rising for four weeks in a row, accumulating a total of 2.86 percent along the way.

Home prices rose 29 percent last year, according to the index, amid record-low mortgage costs and buying from rich mainlanders.

"If the index continues to rise in the remaining weeks of this month, the next resistance will be 100," Wong Leung-sing, an associate director at Centaline, which developed the measure with the City University of Hong Kong, said in the report. The index last reached 100 in October 1997.

Home prices in Kowloon, New Territories East and New Territories West have all exceeded the peak recorded during 2008. Properties in Kowloon surged 5.18 percent in the past two weeks.

Hong Kong Island is the only district in which prices have not exceeded the peak reached in 2008, suggesting there is still room for further increases, according to Centaline.

The report comes after Hong Kong Chief Executive Donald Tsang told lawmakers on Thursday that there is no "obvious bubble" in the city's property market.

Prices for luxury homes in Hong Kong, defined as those costing at least HK$10 million ($1.28 million) or bigger than 1,000 square feet (92.9 square meters), may rise 20 percent this year, real estate broker CB Richard Ellis Group Inc. said January 12.

China Daily/Bloomberg News

(HK Edition 01/16/2010 page2)