China's property prices in first-tier cities will see another year of strong gains under the current monetary policy framework and supportive supply-demand dynamics, research from ANZ indicated on Wednesday.

China's property transactions declined significantly by about 16 percent year-on-year in the first two months of 2014, as many commercial banks have tightened their mortgage loans amid the rising cost of funds.

However, as China appears to be easing its monetary policy and funding costs have dropped sharply, the commercial banks will likely resume mortgage lending again, according to the ANZ research.

"Despite weak transaction volume, property prices continued to pick up on a sequential basis in January-February 2014, indicating that the overall demand is still solid," said Liu Ligang, an economist with ANZ.

However, gains are likely to be limited in third- and fourth-tier cities, where over-supply seems to have emerged, it said.

More Chinese cities see home prices decline

No shift in China's property loan polices