Neighbourhoods provide unequal resources and opportunities. Past research has shown that migrants are less able to move to more resourceful neighbourhoods. For Germany, cross-sectional evidence shows that migrants live in worse neighbourhoods on average, but no longitudinal analysis of changes in neighbourhood quality after residential mobility has been conducted. The present paper closes this gap and tests the place stratification model and the spatial assimilation model. Data from the German Socio-economic Panel and the MICROM dataset are used for the years 2000–09. The data are analysed using fixed-effects panel regression. The analysis shows that Turkish households are less able to improve their neighbourhood quality through moves compared with German households, while households with other ethnic backgrounds do not differ significantly from the native population.