You have done a beautiful job of tucking plants into the crevices of your retaining walls. Your house trim color is perfect -- just slightly lighter in hue than the retaining wall blocks. First I would paint the big, flat gray wall slightly lighter than the blocks and slightly darker than the house trim. The concrete walk and stairs I would stain a mottled blend of the blocks and the house trim colors. Next would be to paint the railing black or the house body color. Now, think of the following as creating a light, airy trellise structure from the walk-level face of the (currently gray) wall to about 7' above the top of the wall (using 6x6" posts attached to the wall) with a corresponding line of posts sunk into the terrace level 2' in from the outside edge of the wall-attached posts. The inside posts would be about 6-8" higher than the outside posts. Put 4x4" wood to attach the outside line of posts to each other and do the same with the inside line of posts. Run wood pieces at the top of the two lines of posts from the inside line to the outside line at about a 45 degree angle. They would be cantilevered up at the terrace level. Across the top of the angled pieces create your top trellise boards which run parallel to the two lines of posts. OK. There you have your basic structure. You might want to extend the structure around to follow the street side of the terrace. You could then follow the suggestion of reom10 above about creating a bench-planter on the terrace side. Your spacing of the boards parallel to the gray wall and attached to the outside posts would determine how private you wanted your terrace to be. You might want to soften the terrace "floor" by using something irregular like flagstone with groundcover plantings between the stones. From the latticework on top of your structure you could hang seasonal flower baskets. Plant vines to go up the trellis and spill down the wall. How about planting a row of tall, narrow shrubs along the neighbor's fence above your terrace to help add to your privacy and make your yard feel less 'structured'? Or, how about patio table/s with umbrellas to block your neighbor's view? Anyway, you have a fun project ahead of you.

Excuse my duh-ness but i'm having difficulty trying to follow whats going on here. Are these two photos an exact replica of your house and pool ? If not a hasty sketch with dimensions could help a lot. By kitchen wall do you mean the wall behind the bar ? And where is the pool wall ? Are you considering the covered area as being "inside" ? Sorry for all those questions lol Sometimes when you have a design problem you need to turn it inside out or on it's head. If you can't beat it maybe embrace it by making a feature of it : i.e. contrast by having the lightest colored pool surround and a great blue or tile inside and under the overhang, something that will echo the water color ? If you have a great covered area as in photo you'll most likely be spending a lot of time there and it could be soothing to be able to sometimes retire into a darker inside. In my book, 10M isn't small and also contrasting two floor colors doesn't necessarily make a space seem smaller and confined and may in fact even open it up. Could it be that you've thought yourself into a box here ? Sometimes one needs to give it all a good shake up and see how it resettles.

Thanks for the replies! My wife suggested we talk to a local real estate agent, so i think that is a good idea... just that Im not sure how helpful they are likely to be if we arent selling yet :) As for saving for our dream house, I dont disagree, however if doing this up nicely over the next ~5 years or so while we live here nets us some extra in the eventual sale, then that of course will help us as well. Interesting thing happened today actually. I got a knock on the door and one of the older neighbours asked if he could take some lemons from the tree. I of course said yes. Anyway he was telling me he had lived in the street for 40 years. I asked him if the house had always looked like this, and he said no that ~30 years ago the old old owner did a massive renovation and pulled off the timber and put up the bricks and gutted the inside of the house. Interesting stuff!

An outdoor room is like any other room. First decide what you want to use it for. For example, my back yard has a couple of rooms. The "dining room" is a table and 4 chairs under an inexpensive ($150) 12 ' X 12' Home Depot gazebo . The gazebo gives a pleasant feeling of enclosure and privacy when we sit at the table, and it also keeps the table clean and dry. We have a big hydrangea shrub right at the edge of this area to mark its edge. It's pleasant to sit so close to something blooming. The "living room" is 2 comfortable chairs and a love seat around a coffee table. We entertain there and pull the dining room chairs over if there are more than 4 of us. We also sit there to read in the evening. There's a smallish tree right beside it so it's pleasantly shady. The "kitchen" is the grill and a small table to set things on, and is closest to the kitchen door. Once you have decided how you want to use the space, you'll need to decide whether you want a new "floor". We have a low L-shaped deck that has the three rooms. Or you may decide on a concrete or slab patio for all or part of it. Farther from the house is some grass, and then more big shrubs (evergreen and blooming - little maintenance). And a little raspberry patch because it's fun to eat them right from the bush. The landscaping really comes last, once you have decided on the functions of the area. Don't start planting without a room plan. You may want, for example, to put one of your rooms right against the fence or wall, and if you've already planted shrubs or made beds then they will be in the way. You want to plant trees and larger shrubs so they are useful as the walls and roof of your rooms. Be sure to check the mature size of your plantings (it's on the tags) so you don't end up with branches hanging over your roof or over your neighbor's property. Don't make the mistake of putting in so many beds or plantings that you don't have time to sit and enjoy. A few low-maintenance shrubs that are planted close to where you sit are just as enjoyable as big swaths of flower beds that need weeding, annual bedding plants and maintenance (unless gardening is a hobby that you enjoy spending time at.) Enjoy your new home!