The couch might feel even bigger because of where it is. Is it possible to put it on the AC wall? Also, if you ground it with an area rug, I think it will feel more like it's supposed to be there and something with color on the wall to tied it in. It's ok if it blocks a little of the small side window. Looks like you might be living in a warm location- sisal would be great for that- not great for wrestling but feels good on the feet.

an ottoman will help part of the couch function as a chaise and you could put one more chair or move the bean back to the slider wall. so one person can lay out and an one can sit. etc. You will need at least a 5 X 7. it needs to be the color platform for the sofa, then it won't feel so lonely. this one is from over stock.

"When living small, think large." That's what I've learned in my interior design class. So a 3 seater is fine in a small living, but the one you've got is too pompous. A lighter built one would be a better choice, look for midcentury designs.

If you do want some smaller seating, try a loveseat against the ac-wall and a free standing lounge chair.

You can make your home more Artistic.I hope this can help you to make your home more beautiful. Weclome to my site: Outletarts .com

I've just moved the couch around, it did use to be here but my partner complained all the time because he couldn't watch tv properly, ha. It's just a really big lounge. Is sisal a rough texture? as I have a small baby. Would you suggest a colourful rug then to warm the room up? I had been looking online at black/grey rugs.. no shag pile please! :)

oh wow those @rinqreation those couches are gorgeous, I actually have just been looking at this one from freedom however it doesn't offer much seating for guests etc.. :-/

Definitely needs some fab. art behind sofa with lots of color. Will help take the eye away from the AC Something whimsical !

Good quality folding chairs are an investment for life, LOL.

Are you allowed to paint the walls?

lol too true, currently they sit on bar stools in the kitchen. no we're not allowed to unfortunately :( do you think a corner modular lounge would suit this space?

in love with the moroccan style rug! i wonder where in aus i can locate something similar!

You can buy Moroccan style rugs on overstock.com they deliver very cheaply and quickly to Australia ( just bought a nice one the other day from there) also, pottery barn just opened in Sydney and they ship Australia wide, good prices and patterns

Yes, a corner sofa would fit in. Again, find one with slim cushions and legs, nice and tight.

Thank you for all your help I ended up buying a new couch - see pics. Am slowly putting the room together and need to get some art work ASAP!

The rug needs color to offset neutral walls and floor.

we might be a bit late with the artwork ideas, but these moroccan inspired canvases would pick up your theme and accent colours well and there are lots of sizes to choose from:
http://www.signarture.com.au/#/gallery/vintage/marrakech-99-p-canvas-art-print/
http://www.signarture.com.au/#/gallery/vintage/casablanca-56-p-canvas-art-print/