Yes it does.
If you consider a strong base like caustic soda, in a 0.05M solution:
Caustic soda dissociates completely in aqueous solution to give Na+ and OH- ions. Each mole of NaOH gives 1 mole of OH- ions, therefore [OH-] and [NaOH] will be the same - [OH-] = 0.05M.
As this is a strong base, we know that
Now lets add some water so that the caustic soda solution has a concentration of 0.01M.
So this shows that the pH does in fact get lower if water is added. It cannot, however, keep on getting lower. As you add more and more water, the pH value tends to 7 (asymptotically...it will never actually reach 7.000 as this is 100% neutral).