You need the actual dimensions of all furniture, Make a scale model on paper, cutting out all pieces including tv, toy storage etc, and place them till you are happy. Allow 0.8 to 1m for walking past couch, You have circulation on 3 sides. Do you need that, with full opening to main living area and two sets of external doors. A second living space works best if you can close it off from the other living space to seperate noise.

Just rebooked at plans, you have lounge at front, what is the family space used for?

Front room is the family space, sofa (3.5m wide) and then a TV. It’s a larger room, and currently hasn’t been invaded by kids toys!!

If the front room is larger, but your new room is wanting the same size lounge plus toys, plus three sides with no walls.....then I think just by looking at the measurements of the front lounge room, that will give you your answer.

The sofa that will be in the new room is 2.6m wide, the “kids living room” which will become the 4th bedroom is currently set up like this. Granted, the sofa is against the wall which allows for better access on the opposite side of sofa.

when you speak about toys i have to assume small kids but i would be planning for longer term use and older adult sized kids with a new living space that can be closed off from the rest of the house and either a bigger extension or consider a wall to combine the rumpus and extension into one bigger room with a separate dining area...btw where is north on the plan and are there good views in any direction and what is the distance to the fences from the proposed extension?

Thanks for your comment! Agreed longer term planning so import. I would imagine kids toys would be swapped out for coffee table/bean bags. North is where the bedrooms are, house is west facing. We have the ability to go closer the fence by about a meter, after that we will be closing off the pass way to the backyard

the problem with open plan areas is that there's so little wall space for furniture so the new rumpus room should be ok for a tv watching room but once you add the external doors you lose the wall space and room to move around... lose the bifolds doors in new rumpus room ... do you really need the external doors on the east side? consider swopping the bay window in the family room to a simple sliding glass door and use windows in the new rumpus and no windows on the west side of the rumpus and how will you use the leftover space in the family room?

Closing western bifolds so sofa can face backyard, could be a window above couch. Access to courtyard from family or dining,

I thought the poster said in the original post, the only non negotiable was the bifold doors to the west of the new rumpus leading out to the alfresco???

If you keep as per plan, with a 2.6 metre wide lounge, you did say 3.5 in your original post. Then I would place the lounge in the middle of the room, and the kids toys in the bottom left. But with the west facing bifolds, are you installing any shading over the alfresco. The room will get very hot if you are not. It is basically a pavilion, since it can be completely opened up, from west to east. But in a practical sense, would you really have the bifold doors open all the way? You know how you live, so you would know. Maybe later on you could have a pool table in there for the teenagers and their friends. And a fridge for drinks.....

Thanks for the post @dreamer, apologies I meant to say 3.5 seater not meter 🤦🏽‍♂️ the drawing is how I envisaged it working out but wasn’t sure if ~70cm each side of the sofa would be sufficient, but I’ll need to scale it out! Having both bifold open at the one time would as mention make it more like a pavilion, realistically would probably be opened fully a hand full of times a year!

Move your sofa 700 from wall and see how you feel. It is a low sofa so not as constrained as it could be.