Previously, both positive and negative effects of residential instability on various health outcomes have been described. The present study tests these effects in a European context, using two different data-sources (1) neighbourhood level data on socioeconomic deprivation and residential instability, and (2) individual-level community survey data to assess quality of life. Multilevel regression analyses showed that socioeconomic deprivation was negatively associated with several dimensions of quality of life, in stable neighbourhoods, while no such effect was observed in average or unstable neighbourhoods. Thus, when accounting for interaction effects, residential instability appeared to protect against negative effects of neighbourhood poverty and, therefore, may be beneficial for residents' quality of life.