Fire Capt. Bob Jones said flames were shooting out from the back and front of the house and two vehicles in the driveway were ablaze when firefighters arrived at about 4:30 a.m.
"The house is only, literally, 50 feet away from the back of the fire hall," Jones said.
"It really got going quickly and it was windy, and that really helped spread the fire throughout the house."
The victims were a young man and woman and the person who remains in hospital is a female, Jones said, adding it's believed they were all students who rented the house.
One of the people who died was found outside and firefighters located the other in a bedroom, he said.
Jones said there was a party at the house on Friday night and that several out-of-town guests were staying there.
"Our evacuee assistance program has relocated some of them from out of town and put them up in accommodation for the night."
Steve Hicks, who lives next door, said he was among a group of people who stood on the street and watched firefighters carry a body out on a stretcher as the house burned down.
"My upstairs tenant's son, I think, put in the first call to the fire department. Then my tenant banged on the door and woke me up and we got outside."
Hicks said most of the people living in the house were in their 20s.
"There's no official word, but the fire appears to have started on the side porch at the front of the house. It's covered and they have a couple of couches there, where people would sit around and smoke."
Hicks said he was watching firefighters investigating near the porch on Saturday afternoon as he tried to process what he'd witnessed just hours earlier.
"When you're out there at four in the morning and there's a blaze going you can't really process it. It takes a few hours. I'm not feeling too good right now. When you know that people lost their lives right there you don't think it'll shake you up that much, but I think it has."
-- By Camille Bains in Vancouver --