Early studies suggest that people living in rural neighbourhoods are more satisfied with their residential location than people living in cities. Consequently, most individuals seem to prefer low-density environments to reside in. More recent studies, however, state that rural residents are no more likely to be satisfied with their residential neighbourhood than their urban counterparts. In addition, a considerable, growing part of the population seems to have a clear preference for urban neighbourhoods. The results of our research, conducted in Flanders, Belgium, suggest that urbanites are more satisfied with their neighbourhood than rural residents are. Neighbourhood preferences differ less between urbanites and rural residents. However, there are differences indicating that urbanites have a preference for rural neighbourhoods and rural residents a preference for urban neighbourhoods. In sum, it seems that people, once they have selected their residential location, are not satisfied with the neighbourhood characteristics and tend to develop a preference for a different neighbourhood type. This mismatch can be partly explained by the strongly developed urban sprawl in Flanders, reducing the residential qualities of urban and especially rural environments. Restricting further urban sprawl, with the help of a more active spatial planning policy, seems necessary to increase neighbourhood satisfaction.