Smart metering and data analytics enable the implementation of a range of on-site infrastructures for energy, water and waste management to demonstrate the interconnected infrastructure of future smart cities. A research project in Western Australia is integrating smart metering technology, household participation and data analytics. An improved understanding of hybrid water systems at residential scale, as socially accepted solutions to promote water efficiency and economic savings, within the traditional centralized urban water network is achieved. An integrated water model and a system of water credits and debits are developed and tested on a case study for which 10-minute logged water consumption data of its hybrid water system are available for 1 year. The model is shown to provide a full characterization of the relationship between the household and the water resources, thus assisting with improved urban water management which promotes the rollout of decentralized hybrid water systems whilst accounting for the impacts on the aquifer as an ecosystem service provider.