DEBT-SHY households and global economic uncertainty are taking a toll on Australia's home values which fell 0.6 per cent in July, adding to a 3.4 per cent decline since the beginning of this year, according to the latest data.

Melbourne's home values suffered the most, falling 1.4 per cent, while Sydney's went up marginally by 0.1 per cent in July, reflecting a stronger housing market and tight supply of homes, according to the property analysts, RP Data-Rismark.

Sydney's house prices are on the decline.

The poor figures follow recent economic data showing home building approvals fell 15 per cent in the year to July, and new home sales dropped to a 10-year low.

Consumers are wary of taking on more debt and home buyers are holding out for interest rate cuts in response to the slowing economy and market jitters overseas.