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.

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 :)

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.

Hi IdaC, I had the pleasure of living in a California Bungalow many years ago now that had almost exactly the same plan as yours apart from a few modifications that your house has had. The living and master bedroom were switched and the ensuite was just a bathroom from the hallway. The problem with the house plan is the blocking of the rear of the house by the kitchen wall to the hallway and so the circulation goes around through the dining. If you want to alter the layout for a more modern lifestyle with good access to the back yard, I would make the living room another bedroom and put in a new long but narrow bathroom occupying some of the current dining room or possibly part of the existing living if you don't mind a smaller bedroom. The new bathroom can be just 1200mm wide having a 1200 long shower against the outside wall with a high window in it and then the toilet and the vanity near the door. Put the plumbing on the new living wall unless you install full length wardrobes on the wall between it and the new front bedroom. Then I'd delete the back bathroom and make that and the laundry into a walkthrough scullery and laundry and keep the outside door. Put a galley kitchen along the central back wall of the house with an island facing a new dining area where your current kitchen is with double glazed doors to the front hallway. Then make the back bedroom and 3/4 dining room, the living room and open that up to the rear yard. Ideally you'd want the living space on the North side of the house and the plumbing areas on the South, but that might be an expense too far. You could build a really great outdoor entertaining space outside the living room that links with the backyard bungalow if that became an overflow living area/man-woman cave!!!! or just a granny flat or office. If you want to do it in two stages, start by builing the new bathroom and opening up the back bedroom and 3/4 dining into the living room. That way you can start with the three bedrooms where they intend to be. Then you can look at doing the kitchen, scullery, laundry and dining when you are ready and either set up a temporary kitchen in the living space or eat out for a few weeks between when the old kitchen is removed and the new one becomes usable. Good luck, Christine.