is the downstairs ceiling height the same throughout? which direction does the block slope? please show position of all windows, the stairs would be better in a more central location but all measurements need to be confirmed and you should check with council to find out what rooms can be included downstairs ... i wonder if removing bed 4 walls would create better connection to the rear deck and pool but no specific suggestions can be made until the existing building is better understood ..

Hi, where to you want the new living space to enter into the backyard. when looking at photo at rear of house -Via the existing door area to right of steps. Or under the deck to the left of stairs? Either way add double sliding doors or French doors to this access point. Where is your clothesline outside. Laundry door should be convenient. Would you like a laundry shoot from upstairs? This doesn’t have to end in laundry, could be into a cupboard. Or I’ve always wanted a dumb waiter

without the legal headroom downstairs you can improve the feeling of height by cladding under the floor between the exposes rafters, hiding all the pipes and wires and painting the new ceiling white but my main suggestion would be to sacrifice the small upstairs bedroom to create a bigger kitchen, better connection to the deck, better stairs location, easier access up and down and more space for the rumpus and bedrooms downstairs...more precise details would depend on how you want to use the rooms and major cost of rearranging plumbing in an existing concrete floor so i've left the downstairs plumbing intact but if the downstairs narrow store room could be opened up you might squeeze in a reasonable sized garage without having a major extension out the front but always depends on accurate dimensions and structural restrictions but i've left the small supporting posts to show how they could be fitted into or replaced by new dividing walls and extra light could be provided in windowless spaces with solar skylights

Oklouise has chosen a great position for the stairs by using that small bedroom this will also allow much needed space for the wall of pantry cabinets in the kitchen.

I have added some more ideas for you to consider, I think that your existing laundry is a perfect space for a bedroom with french doors opening to the outdoor alfresco garden and pool. This downstairs space could be used for teenagers, Parents, Air B&B, even with different ceiling heights. I had an aunt that did this in her downstairs smaller space, the lower ceiling area was used for a bedroom and study both had windows and were wonderful. cheers

another option to consider would be an extension of the rear deck to enclose the rear stairs and create a sheltered stair well without sacrificing any internal space for for stairs and potentially rearrange the front steps (without losing bedroom window) to add an extra room above the front porch so that the old study can be used for better connection to the rear deck and perhaps create a separate lounge (or extra bedroom) out of the old living area

Always a good idea to live in a new home for awhile to get the feel of it, and seeing that you are planning to do the reno in stages that would work. Do you have any photos with views of the front of the house. cheers

it comes down to balancing outcomes against the numbers....by the time you muck around with internal changes on existing upper level, stairs, windows, not to mention potential issues of non-compliance, it may prove a cleaner/better option/outcome to develop additional spaces under the deck with proper ceiling heights and better light quality.......seriously we've done a bunch of these similalr types of 1960's 2 storey brick monsters over the past decade where you're dealing with managing disconnect between main living on upper and external spaces and it's remarkable how the numbers add up.....and as I have mentioned on here time and time again, it can be false economy trying to rearrange within existing footprint with consideration to the opportunity of alternative solutions that minimises (arguably compromised) renovations (a more resourceful strategy) and distribute budget into more effective, appealing & higher value adding extended space...

There's nothing worse than dungeon-like space...it ALL about the light and sense of space when it comes to developing/designing areas that appeal......

All I'm saying is make sure you consider various options and crunch the numbers properly and if you can;t do that confidently on your own seek Pro assistance in this regard

Best of luck!

PD :)