1st Storey addition vs Lower level excavation

Hi there,
We’ve recently had plans approved to add a 1st storey addition to our existing house for a growing family in Sydney. With the current cost of building including the amount of structural engineering involved to support the new level, the budget has blown out way over what we can afford and has bought us back to the drawing board to consider other options.
We live on a sloping hill with the front of the house on rock and the back finishes with a balcony sitting approximately 2.2m off the ground. One option we were considering was to excavate and build underneath the balcony area and have it join to the existing granny flat below the main level.
I realise excavating can get costly, but was wondering what other costs/issues I should be looking out for if we were to look into this option further.
Really appreciate any advice.
Cheers