Abstract: Urban environments face the serious challenge of complying with relatively tight constraints regarding land and tenant density. In fact, this has become a key constraint in both current and future urban designs. Moreover, wellbeing is strongly influenced by urban planning and design decisions. The objective of this study was to examine the effect of spatial parameters on the wellbeing of potential dwellers through VR experiments. The research incorporated two experiments that were conducted in a VR laboratory, by manipulating virtual twins of an existing urban environment. The first experiment focused on increased density levels combined with commerce and vegetation, while the second one focused on variant morphologies within a fixed density level. The results indicate that morphology, density, vegetation, and commercial activity have a significant impact on people’s wellbeing. The findings of this research emphasize certain design principles that could improve urban designs that are part of densification processes.