My first attempt was,
If you notice that, Image is not showing in the svg box.
Reason: Because xlink:href attribute needs to be there even with empty value to initialize the HTML svg image.
So, your image tag should be like this
<image height="500" id="img1" width="500" xlink:href=""
data-bind="attr:{'xlink:href': image}"></image>
Solution, with empty xlink:href attribute
Hope this may help to somebody with the same problem!