This study discusses the actual time-series pattern in commercial and office land prices during a bubble period, from the late 80Ìs to early 90Ìs, in Tokyo Central Business District. A varying parameter approach, which allows the implicit prices in relation to the attributes to vary intertemporally, is employed for constructing a transaction-based price index. Forward extensions of a conventional hedonic index require that parameters of a hedonic model are newly estimated at every extension, using a new data set where the latest available transaction information is added into an existing data set. These extensions imply that the existing values of the index might vary because hedonic estimators, especially those of time dummy variables, can change. Moreover, a price index that holds the implicit prices fixed may be biased since implicit prices can be unstable when land values fluctuate sharply as in a bubble period. This study thus examines the reliability of indices based on respective approaches, and investigates the movement of implicit prices over the time period. Transaction-based price indices at Tokyo Central Business District are developed for the period from 1981 to 1992. It is shown that the bubble started at the beginning of 1984, and that the initial symptom of collapse of the bubble was in 1989. Both of these dates are much earlier than the times observed in the appraisal land price index. Furthermore, our results indicate that implicit prices are different intertemporally, and provide evidence of the usefulness and reliability of the varying parameter approach when a market is in a bubble.