Hong Kong home prices retreated to their lowest level in nearly eight and a half years in January.

Figures from the Rating and Valuation Department on Friday showed that the city's home price index dropped to 287.6, from 288.9 in December.

That marked a 0.4 percent decline on a monthly basis and a 6.5 percent retreat from a year before.

Prices had risen in October and November after cheaper borrowing costs attracted buyers to take the plunge.

Commenting on the latest data, Eddie Kwok, executive director of valuation and advisory services at consultancy CBRE Hong Kong, said January was low season for the property market due to the Lunar New Year holiday.

Kwok also partially attributed the declines to developers rolling out new residential projects while also pushing existing inventories.

But he said he expects a rebound later this year, noting that home prices are highly correlated with the city's stock market performances.

"If the Hang Seng Index remains at its current level or continue to increase, we expect residential prices for the secondary market to stabilise and potentially pick up going forward," he said in a statement.

Rental prices continued to edge up in January, with the official key gauge rising to its highest level in four months to stand at 192.9.