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.

Thank you so much for your comment after all this time. The colour you have suggested brightens the front door area beautifully and if the two red pots were painted in a tone to match, we think it would look great. Not sure if you can get Crestview doors in New Zealand but there must be something similar. We like the idea of going away from another cedar door - mainly because it would stand out too much while it was weathering. I don't know whether we would have been that brave but the tangerine works so well with the jade green of the joinery. I have re-laid all the stones and put a new wider front step in. The timber colour will soften down in time. I put a big pot in the garden to draw visitors to the front door and have added some colourful bromeliads to the garden alongside the house to make the area a bit more cheerful. We can't make a decision about what to do with a larger 'overhang' to protect the front porch yet - it is a project in progress. Thanks again for your post.

There are different kinds of ivy and plant privacy screens that can be purchased which might cover your fence and gate and give you the privacy you are looking for. I have not used them before but the photos look very nice. If you picked a color to match your side or front bushes, it would look very nice and becost effective as well. You have a beautiful home. Good luck and please post photos of the final.

Thanks for all the great ideas everyone and sorry I didn't explain the polycarbonate a bit better :) This is along the lines of what we'll be using... http://www.psp.co.nz/building-brands/corrugated-sheeting/suntuf-polycarbonate The area is an absolute sun trap and we're hoping to use it as an extension to our living space, especially on rainy days! I've just sent my husband out to get a few pots of different stains for is to try - darkest brown (cedar) and a lighter brown (rustic oak) both by Cabots + the black we already have. Hopefully we can decide between one of those! I probably should have mentioned we will have black aluminium pool fencing running along the top of the second retaining wall - so the real question is do we keep everything black (pool fencing, horizontal fence, retaining walls and pergola) or do we go with a dark (or even light) brown for the pergola and retaining walls.... We just keep going around in circles at the moment. Decisions, decisions! Thanks again :)