The Greek debt crisis and "sensational coverage" of the Chinese share market crash are being blamed for another fall in consumer confidence.

The widely watched Westpac-Melbourne Institute Index of Consumer Sentiment fell 3.2 per cent in July to reach 92.2.

That is the lowest level since December last year and is well in the range where pessimists outnumber optimists, indicated by a reading below 100 points.

Westpac said pessimists had outnumbered optimists for 15 of the past 17 months, with a small upward bump during May after the budget and a rate cut now left well behind.

The bank's chief economist Bill Evans said it was not surprising that there was a solid fall in July given recent market turbulence.

"We had a taste for households' sensitivity to disturbing news around European instability in December 2011 when the index tumbled by 8.4 per cent from 103.4 to 94.7," he noted in the report.

"This time the concerns around Greece have been complemented by sensational coverage of the collapse in the Chinese share market."

Global economic concerns were highlighted by a 10.5 per cent fall in respondents' assessments of economic conditions over the next 12 months and a 4.4 per cent slide in optimism about the economy over the next five years.

Perhaps the most interesting detail in the report was the regular questions around housing.

While the index on home price expectations was up 8.2 per cent, the index tracking whether now was a good time to buy plummeted 16.7 per cent.

The latter measure is now at its lowest point since June 2010, which preceded a period of slightly falling home prices across most Australian cities.

The decline was an even bigger 19 per cent in the booming property market of New South Wales, taking the index to its lowest level since before the global financial crisis in February 2008, when interest rates were at 7 per cent and still on the rise.

"It is likely that this sentiment is being driven by affordability concerns and may be signalling a slowdown in the Sydney property market," Mr Evans added.