FYI I live in Melbourne, Australia

what is the length and width of the block and distance from the house to all four boundaries?

Block totals around 390sqm

we need the distance from the house to all four boundaries if you want to consider an extension

It’s a pretty house. Have you spoken to council about the max fence height? It may be 1.5m but you can always plant behind it for extra height. And there will also be a set back that you need to adhere to for your deck extension.

Yeah we're thinking that we will use hedging to screen off with a 1.5m fence. In terms of the deck, what sort of set back would I need to adhere to as I was wanting to build it all the way to the side boundary wall which is our neighbours garage wall

The rear boundary is about 5m

The location for the bedroom / ensuite extension would be to square off the house adjacent to the laundry / main bathroom - would this be a good idea?

Failing that it would be to extend into where the shed currently is but I assume this would be tricky with boundary setback

You have said that the block is 390sqm. What is the ratio of building to open space for your block. The council will have these zonings.
For example if the ratio/percentage is 50%, then the max building can be 195sqm, so this needs to be taken into account when deciding to extend your home.

If extending your deck, so the floor component only, this could be extended to the boundary. You would have to consult the council for guidelines about how far you can extend the roof component.

Site coverage - Victoria

without the correct dimensions and distance to all the boundaries it's difficult to be precise but maybe the front porch could become a study and the space behind the bathroom and laundry could be an ens and wiw but adding a fourth bedroom would be difficult without a hallway which would have to subtract space away from elsewhere but something like this might work based

Am I missing something , but why would you want a decking right out to the front fence ? Maybe it's just me , but maybe a built in barbeque or a spa pool , with some decking ( and even privacy screening ) , but why cover everything ?

I can sort of understand a small awkward 'courtyard' area being decked or made into a stone covered area , but the whole front area seems weird .

Yeah apologies I wasn't clear, I meant extending the existing deck to go to the side boundary, not the front.

Makes way more sense .

Now the tricky bit , BUT I'll offer another idea , although probably more expensive , for adding on . The existing bathroom is in the middle of your house , with the laundry to the left . To the right of that is what I will call Bed 2 -- a smaller bedroom . The Rear Right bedroom I'll call Bed 1 ( Master ) and the Left Rear will be Bed 3 .

Now , if you extend your floorplan to the Left ( instead of to the rear ) basically enlarging the current laundry , you could make the existing Bath and Laundry and the extra 1.5 metres into your new Master ( Bed 1 ) and ensuite and WIR . This is assuming the walls aren't load bearing except the external wall , and there is a slight advantage that theb plumbing is already there for the en-suite .

Across the hall , you turn what I call existing Bed 2 into the primary Bath and also Laundry , OR leave as a Bedroom . With me so far ?

Now the 'rear' has also been extended 'leftwards' to approx equal with the existing kitchen boundary , maybe even closer to the boundary , depending on council rules . Across here you either have 3 bedrooms and a hallway , or Bed , Bathroom , Laundry then Bed if you keep the other bedroom as it is .

This still gives you some useable back yard , both options will need partial re-roof and new trusses and new external walls -- my gut feeling is this will look and work more logical than adding onto the rear ( as oklouise says , how will you do a hallway without it looking strange and added , for example ) .

It looks like a very nice house , so I assume it is worth spending the $$$ -- i.e. it will probably add the $200k or whatever you spend , to the valuation . Of course , the other option is to sell and spend $200k or whatever finding elsewhere , and I guess you have considered both options .

You will need to talk to council about planning permission. There are parking, setback and garden area requirements. Learn your constraints first.