Many plant producers tend to overwater crops to prevent water stress and salt-induced damage. These practices waste irrigation water and cause leaching that harms the environment and increases production costs. In order to optimize water consumption and minimize the environmental impact of plant production, this study aimed to determine the physiological and morphological responses of Hebe andersonii to three substrate volumetric water contents (49%, 39%, and 32%). The experiment was conducted in a greenhouse with an irrigation protocol that consisted of adding small volumes of water to avoid leaching while monitoring substrate moisture with dielectric soil sensors. The results showed that moderately low substrate moisture improved the water-use efficiency, while growth was significantly reduced under more severe water deficit conditions (but without leaf chlorosis or abscission). The photosynthetic activity of Hebe was primarily controlled by the stomatal aperture, which was co-determined by the substrate moisture and seasonal temperature. Hebe leaves promoted non-photochemical quenching when carbon assimilation was limited by a water deficit, and accumulated solutes through an osmotic adjustment process (especially Cl−, Na+, and K+) to maintain their water status. Overall, Hebe andersoni cv. Variegata could successfully grow and improve its water-use efficiency in low substrate moisture and under a non-draining irrigation regime.