Kill two birds with one stone and replace the balustrade with a full length, double sided cabinet. This will blur the height difference between the rooms while creating more if a sense of the two rooms working independently of each other, and provide a place for interesting piece or two on the top(like sculpture). In the process, you could ensure the traffic flow and furniture of the rooms works best with the passage to the lounge where it is, and if not, decide where it works best and build the cabinet either side of the passage.

Hi Lorna, it is a lovely space. A big challenge in these rooms is getting comfortable storage because the only walls offering height is the wall you need for the bed. The other walls are too low for you to be able to access storage on them even if you position it there(like under the window seat). So if you need storage/closet space, you might want to consider putting the wardrobe/closeton the far left side next to the bed so that it doesn't close in the room too much and then have a chest of drawers on the right side(1st image), or if that won't give you enough storage you might need to go either side of the bed, in which case, putting shelves behind the bed will project your bed forward out of the recess between the closets(2nd image). Also worth considering a bed without an and so that is one less thing to dodge around(and kick you toe on) in the tighter space. Happy renovating:)

If this is just a budget improvement then I would try to fix the cracked tiles and missing grout, paint the window frame white and add white shutters on the window, paint the vanity white (although I don't like doing that either) and get new handles and taps, toilet roll holder etc., install a lovely white potted plant, as shown above and white fluffy towels. A new white frame on the mirror or replace it with a slightly smaller white framed one. Then I would save up for a white stone bench top or stone overlay bench top and the cream will go nicely with all of it. Unfortunately your shower seems to be the most dated part. If you try to change the door you may find that you have missing tiles, although new floor tiles in the shower would probably look OK and add a glass hinged door. Good luck.

Errol, we also have an 80s brick home with similiar window placement. When the budget allows we would like to change the larger of the windows (what would be your existing sliding door in your layout) to french doors to open out to our deck area. We would keep the window in meals area as a window as there is not enough circulation space inside to use a door, even a sliding door. For us, french doors would work best as they can fold back relatively flat against the wall when opened, while bifold doors would stick out too far. We will also replace the old diamond grill screens with crimsafe which aren't as ugly! Why is it that houses in home decorating magazines never have screens? Would love the aesthetics of no screens but in Qld screens are essential. We don't have the issue with lack of light inside that you do (and we love our light-filled open plan space so skylights might be a good investment for you), but the downside is our outdoor area is underutilized as is in full sun most of the day and is uncovered. Could you change your outdoor roof to a vergola system or something more transparent to get more light inside?