Hi Ildi, I would definitely repaint those walls to more neutral colors, you can add more interest with colorful accessories that don't dominate the room, this is important especially in a smaller space.

You can consider having one accent wall, using horizontal stripes to draw your eyes further into the room towards the windows, thus making the room bigger.

If you have a small round table underneath the light fixture it would be enough to distinguish this eating area, the key is minimal in your case.

Definitely go to Ikea, they have specialty furniture that will fit your space, and if our patient enough, will help you with a floor plan. I believe they even have a video online about how to buy furniture for a small space such as yours. Good Luck!

You could try using a bookshelf that's open on both sides to de-lineate the two areas if you really want, but I see no need. Just have the table and chairs on one side and your seating area behind it. Use color and style to make them flow into each other. I like your choice of bold turquoise, but perhaps use it only on one wall and paint the other color more subdued, like a light beige, grey or taupe.

All great tips:) The paint is going to stay for a while...cost me a lot and i love the insanity of it! I used to have the table and chairs in front of that cabinet, under the light, with another beige carpet (see middle picture of where it was), but it was almost in the way and everyone commented on it's random 'middle of the room' placement. I've also had someone suggest a condo sized L couch instead of that one..i just don't know what to do!

Start by putting it all on paper. Use one-quarter inch grid paper. Each square equals one foot. You'll see what can fit in the space, and how much room you have to maneuver around. You need a minimum 3 feet of space to move around things properly.

If you don't want to allocate too much of your budget on remodelling, try these few simple things: get a small table with a drop down leaf, perhaps a half-moon shape, that will fit flat against the wall, under the light fixture and will open up when you have more guests. You could also get one of those bar style ones, that attach to the wall and hinge down completely when not in use. Get a cheap bookshelf from Ikea that will act as a divider (not too wide) and you can use it to put dishes on from the "dining room" side and books on from the "living room" side. Put a couple of potted plants along the top shelf to act as a green screen. Hang a mirror on any wall that will provide a good reflection in the mirror (its just as important what the mirror reflects as where it's hung). Buy a small, inexpensive area rug, like at Walmart or Home Depot or Ikea, to put in front of your sofa. A creamy white or light gray would look good with your sofa and trim. Get some turquoise pillows, along with some in that yellow shade and perhaps whatever colour area rug you go with, to tie everything together. These things are not expensive. Home Sense (Canada) or Home Goods (US) is a great place for that. You could also try putting the rug on a diagonal with the sofa along the long edge, OR use the sofa as the room divider, facing the window squarely, if it's not too big and you have another piece, like a chaise or chair and ottoman, to put closer to the window, for reading or working on the computer. You need to take some time to play around with your furniture, move it around, think outside the box. Maybe repurpose something from another room - a bedside table as a sofa table? Most importantly, don't stress - have fun :)

Thanks everyone for your thoughtful suggestions!! I'll definitely be re-reading this come purchasing/renovating time!!

I love your cozy nest. Round mirror over sofa (white?). Have a beige or beige and turquoise print or white tablecloth (full length: to the floor) on dining room table so it looks like it is a sitting area for a large living rm. and not really a part of a dining room. Place a clear plastic "cloth" over table cover so you don't have to worry about spills and take the plastic away when you expect company. Adorable condo!